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

Virtual gold, real VAT – CJEU judgment in Case C-472/24 Žaidimų valiuta

The CJEU ruled that trading virtual gold from online games, such as Runescape, does not qualify for VAT exemption as a currency, nor can it be treated as a multi-purpose voucher (MPV).
The Court determined that virtual gold functions only within the game ecosystem, not as a general means of payment in the real world, distinguishing it from virtual currencies like Bitcoin, and is considered an electronic service directly providing a benefit, not an instrument for future benefits.
Consequently, the sale of such virtual gold is subject to VAT on its full value, as the Court did not extend the special margin taxation procedure (typically for second-hand goods) to intangible digital assets, despite an Advocate General’s suggestion.

Source MDDP

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In-game gold computer game not legal tender

The Court of Justice ruled that the VAT exemption for legal tender does not extend to the exchange of real currencies for in-game gold from MB Žaidimų valiuta, which is a virtual currency used exclusively within an online video game.
MB Žaidimų valiuta engages in trading this in-game gold, which can be used for various purposes, such as purchasing items, services, player status upgrades, and accessing in-game events.
The ruling clarified that in-game gold cannot be classified as vouchers, and therefore, Žaidimų valiuta is liable for VAT on its activities related to this virtual currency.

The Court of Justice of the European Union (CJEU) ruled that virtual gold in Runescape is not considered currency and therefore does not qualify for VAT exemption, highlighting the significant differences between game-specific virtual assets and broader payment instruments.
The CJEU differentiated between vouchers (which need to be redeemed) and consumable benefits (like in-game gold), suggesting that this distinction may lead to further legal disputes regarding the classification of virtual assets.
The CJEU declined to extend the margin scheme to virtual assets, reinforcing that the VAT base must reflect the full sale price of the gold, and it carefully avoided categorizing the supply as an “electronically supplied service,” leaving the applicability of certain regulations unresolved for the future.

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.