United Kingdom: HMRC Clarifies VAT Rules for Crypto-Asset Transactions

• HMRC issued guidance confirming there are no crypto-specific VAT rules; crypto-asset sales must be analyzed under existing VAT rules based on the asset, customer type, and supply.
• VAT treatment depends on what the crypto-asset represents: it may be goods, services, or tangible/intangible assets; NFTs are taxed according to the underlying asset they represent.
• Sellers must consider whether the buyer is a business or consumer, where the customer is established or resides, whether the supply is an electronically supplied service, and the role of any platform in the transaction.
• For cross-border B2C electronically supplied services, sellers must keep two pieces of evidence proving the customer’s normal residence.
• HMRC directs sellers to existing VAT registration rules to determine whether they must register; no separate VAT regime is created for crypto-assets.

Source: globalvatcompliance.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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