The concept of economic activity is, in fact, interpreted in a very broad manner (the Court of Justice of the European Communities specifies that the concept of economic activity must be interpreted in the broadest possible way (C.J.C.E., March 26, 1987 (Commission v. Netherlands), C-235/85, Rec. 1987, p. 1471 and concl. C.0. LENZ, p. 1480, no. 21), so that many individuals could be considered to be engaged in an economic activity without actually carrying out a professional activity within the meaning of the Income Tax Code.

Read: L’auteur et l’artiste face à l’impôt – Watelet s. Implications du nouveau régime de taxation forfaitaire des droits d’auteur et des droits voisins, p. 195.

Article 9 of the COUNCIL DIRECTIVE 2006/112/EC of 28 November 2006 on the common system of value added tax:

A “taxable person” is anyone who independently carries out an economic activity, regardless of the location, and regardless of the purposes or results of that activity.

Any activity of a producer, trader or service provider is considered an “economic activity”, including mining, farming and professional or similar activities. In particular, the exploitation of a tangible or intangible asset with a view to obtaining permanent income is considered an economic activity..”

It is not necessary that the operations carried out by a person be essentially or exclusively oriented towards the functioning of the market or economic life in order to fall within the scope of VAT. It is sufficient that they are concretely linked in some way to the economic life

Read: V. Sepulchre, “Analyse de jurisprudence”, RDG, n° 04/06-05).

Intervening in economic exchanges as an artist for remuneration and in a regular manner therefore subjects the artist in principle to VAT liability.

The habit

TheVAT Manualprovides information on what the administration means by “in a usual way”.

It should also be noted that the activity does not have to be professional, i.e. it is not required that the person or group carrying out the activity on a regular basis aims at obtaining a livelihood.

The habit implies a repetition of operations, even though they may be carried out at more or less long intervals, as long as they present a certain regularity. Thus, a person who, every year at the same time, organizes an event in the course of which he carries out operations covered by the Code, is engaged in a regular activity within the meaning of Article 4 (liability to VAT).

In the same spirit, it was decided:

• that a lease of movable property, which is a continuous transaction resulting in the periodic receipt of rental payments, results in the lessor being liable for tax even if the lessor grants use to only one lessee;
• that a company that is formed for the performance of a single contract, involving the staggering over time of repeated operations (e.g., the construction of a road), is a taxable person even though it enters into only one contract;
• that an activity which is carried out over a relatively long period of time and which gives rise to the issuance of statements of fees confers the status of taxable person on the person who carries it out, even if this activity is carried out under a single assignment;
• that natural persons who keep domestic animals (dogs, cats, etc.) that reproduce are not taxable persons if they only keep a limited number of breeding animals corresponding to normal private use, if they do not systematically continue the reproduction of these animals and if they only resort to selling them accidentally, to avoid a temporary surplus. On the other hand, persons who, having a number of breeding animals exceeding the requirements of a simple private use, systematically continue the reproduction and the breeding of the animals with a view to selling them on a regular basis, are to be considered as taxable persons;
• that a beekeeper who sells all or part of his production on a regular basis is a taxable person (Decision E.T. 88.513 of 13.05.1997 – Revue de la TVA n° 129, p. 635, n° 1033).

A person who occasionally performs accounting work for a merchant does not become a taxable person by virtue of that transaction, but a person who performs that work for several merchants or who usually performs that work for a single merchant is a taxable person.

Finally, it should be noted that a taxable person does not lose his status for an occasional transaction that he carries out, when it is part of his usual activity. This transaction is taxable for VAT.

Examples

1° Occasional assignment of a patent by a design office that owns an invention that is the result of its research.

2° Occasional sale by a taxable person of a capital good that he has used in his business.

It seems to us from the VAT Manual and therefore from the commentary of the VAT Code that the supply of an NFT via a platform AND/OR the transfer or concession of related copyrights is therefore in principle subject to VAT since the creator/(re)seller is a taxable person as soon as the transaction is usual.

Activity with or without profit motive.

To be considered a taxable person, a person or group does not necessarily have to carry on its activity for profit, i.e. with the aim of making a profit. They do not even have to carry out their activity with the aim of obtaining a livelihood. On this point, we therefore depart from the notion of merchant.

The consequences of this situation are significant. Many groups and persons who do not pursue any profit-making purpose and who are therefore not traders may be taxable persons. This is the case, for example, for public law bodies, public institutions, non-profit associations, public utility institutions, etc.

The holders of the liberal professions, who are traditionally not considered as traders, are taxable persons, but without the right to deduct if they provide services exempted by article 44 of the Code (see chapter X).

Amateur artists who carry out their activity only to occupy their leisure time, without seeking the realization of any gain, are also, in the same way as professional artists, taxable persons when they usually sell their works (Circular n° 7 of 12.06.1974 – Revue de la TVA n° 17, p. 311).

Activity carried out as a main or secondary activity.

The economic activity that a person engages in as a sideline may qualify him as a taxable person if the habit and independence exist.

A side hustle is an activity that is performed alongside another activity, which is the main activity.

The side activity may or may not be related to the main activity.

The provisions of Article 56bis of the Code provide, however, a franchise regime, in favor of small businesses, the conditions of which are set byRoyal Decree No. 19, of 29.06.2014.