United Kingdom: HMRC Says Crypto VAT Follows Underlying Supply, Not Token

• HMRC says UK VAT treatment of cryptoassets depends on the underlying supply, not the token itself; existing VAT rules apply with no special crypto VAT regime.
• NFTs are taxed based on what they represent: digital content/services, rights, or physical assets may each have different VAT outcomes.
• Customer location and status must be established beyond wallet data, as blockchain records alone may not show whether the buyer is in the UK or is a business/consumer.
• Crypto platforms and marketplaces may be liable for VAT on third-party sales, especially where they facilitate electronically supplied services or set the terms of sale; HMRC says most qualifying digital platforms are likely to be responsible for VAT.
• HMRC’s approach is technology-neutral and focuses on the actual transaction, broadly aligning with destination-based VAT principles rather than creating crypto-specific rules.

Source: vatcalc.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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