Online Intermediaries Are Obliged To Collect Spanish VAT On Sales Of … – JD Supra
Due to the anonymity of non-fungible tokens’ (“NFTs”) transactions, sellers face practical difficulties in determining whether or not they should charge Spanish Value Added Tax (“VAT”) to the buyers on sales through online platforms. This fact has lead the Spanish Tax Authorities (“STA”) to conclude in a recent ruling that an online marketplace which facilities the sale of NFTs in exchange for a fee shall be deemed to act in its own name on the sale of NFTs to the final purchaser, and therefore it is liable for collecting Spanish VAT from the buyers. In practice this new ruling changes the previous criterion of the STA regarding the marketplace liability in the sale of NFTs and, in our view, involves that online marketplaces shall obtain information to confirm whether the relevant purchaser is acting or not as entrepreneur for VAT purposes and the place where the buyer is based.
In March 2022 the STA issued a ruling with reference number V0486-22 analysing the VAT treatment of the sale of NFTs in Spain through online platforms (we refer to our note “First Spanish ruling on the VAT treatment of the sale of NFTs”). In such ruling the STA did not mention anything regarding the VAT implications of these sales for the marketplaces. However, the STA have recently issued a second ruling, with reference number V2274-22, dated on 27 October 2022, which analyses the VAT treatment of the sale of NFTs in Spain with a very similar (almost identical) fact pattern to the previous ruling, in which the STA take a different approach with regards to the VAT impact of these transactions for online platforms. According to the STA, the new ruling “qualifies and complements” the previous ruling.
According to the facts mentioned in the ruling, the taxpayer is an individual who creates illustrations and sells them as NFTs on an electronic marketplace.
The marketplace merely intermediates in the sale of NFTs and does not have any ownership right over the NFTs.
Spanish VAT treatment on sales of NFTs: Marketplace liability
Following the previous ruling, the STA confirm that the sale of NFTs should be considered as “electronically supplied services” for VAT purposes.
However, in most of the sales of NFTs, sellers are not provided with any personal information of the purchasers, who only identify themselves before the digital platforms acting as intermediaries. Thus, sellers face practical difficulties in determining whether or not they should charge Spanish VAT to the buyers.
These circumstances have lead the STA to change its previous interpretation and conclude that, pursuant to Article 9a of the Council Implementing Regulation (EU) No 282/2011 (“VAT Implementing Regulation