Comments on ECJ C-472/24: Court Rules Virtual Gold Not Exempt from VAT

Case Background: The Lithuanian company Žaidimų valiuta specializes in the purchase and sale of virtual currency, specifically “gold” for the online game Runescape, in exchange for traditional currencies. Ownership of the virtual gold remains with the game operator, although it grants players certain rights and services within the game.
Tax Authority Dispute: After a tax inspection, Lithuanian tax authorities classified the company’s transactions as taxable services subject to VAT, arguing that the virtual gold does not qualify for VAT exemptions under Article 135(1)(e) of the VAT Directive. Žaidimų valiuta contested this, asserting that the gold should be treated as a virtual currency exempt from VAT or as a multi-use voucher, limiting the taxable amount to their profit margin.
Court’s Decision: The CJEU ruled that the VAT exemption for means of payment does not apply to the virtual gold, as it is used solely within the game and not as an alternative to legal tender. Additionally, the court rejected the classification of the gold as a multi-use voucher, stating it does not provide future consumable advantages but is an electronic service consumed directly in the game, thus making the transactions subject to regular VAT on the total sale price.