VAT Rules for Virtual Game Currencies: EU Court Advocate General Opinion

A Lithuanian company bought and sold virtual gold from online games, earning hundreds of thousands of euros annually, but faced a VAT assessment of over 46,000 euros for not charging VAT on these transactions
The entrepreneur argued the transactions should be VAT exempt as currency exchanges, treated as multi-purpose vouchers taxable only upon redemption, or subject to VAT only on profit margins rather than full transaction values
The European Court previously ruled in the Hedqvist case that cryptocurrencies like bitcoin can qualify as means of payment under VAT exemptions because they serve as contractual payment methods with two-way flow capabilities
Advocate General Juliane Kokott analyzed whether in-game gold qualifies as currency under VAT law, highlighting the challenge of applying traditional tax legislation to modern digital economy realities
The case demonstrates the ongoing legal questions about how virtual currencies and gaming assets should be classified and taxed under existing European VAT frameworks

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.