In Spain, NFT is classified as a digital service and liable to 21% VAT. In other words, it is concluded that the sale of NFTs should be considered as a supply of “electronically supplied services” and, if the place of supply is deemed to be the Spanish territory, these sales are subject to Spanish VAT at the general rate of 21%.
NFT treatment in the scope of VAT in Spain
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Author: Kristina Dosen
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Fiscal subject related
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581
Content accuracy validation date:
31.05.2022
Content accuracy validation time:
10:13h
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More precisely, AEAT (Agencia Estatal de Administración Tributaria) has ruled that the supply of non-fungible tokens is to be regarded as the supply of an electronic service and subject to the standard rate of 21%.
- The NFTs are traded on an electronic marketplace, which intermediates in the sale of NFTs in the name and on behalf of the seller, and the seller is not provided with any personal information of the purchaser, who is only identified on the platform with a nickname. The STA address for the first time the nature of NFTs in order to determine whether the transfer of NFTs is a supply of goods or a supply of services, and the STA state that NFTs are“digital certificates of authenticity” that, through blockchain technology, are linked to a unique digital file (i.e., NFTs are digital assets that cannot be mutually interchangeable).
In order to determine whether the seller is obliged to charge Spanish VAT at the general VAT rate of 21%, the STA describes the place of supply rules, which are based on the condition (business or consumer) and location of the purchaser:
- If NFTs are sold to a company or to an individual which is acting as an entrepreneur for VAT purposes, the place of supply will be where the buyer has established its business, unless such establishment is outside the EU and the use and enjoyment rules are applicable.
- If the buyer is an individual not acting as an entrepreneur and the seller is established in Spain, the place of supply will generally be where the buyer is established, has his/her permanent address or usually resides. This means that (i) if the buyer resides in Spain, the sale would be subject to Spanish VAT, (ii) if the buyer resides in another EU Member State, the sale is subject to VAT in the EU Member State of consumption unless the EUR10,000 threshold is not exceeded in a given year, and (iii) if the buyer resides outside the EU, the sale would fall out of the scope of Spanish VAT, unless the use and enjoyment rules are applicable.