The purchase of NFTs could be subject to VAT by the platform or even by the seller (professional and therefore taxable).
A parliamentary question has been asked on this issue.
When a Belgian taxpayer buys a work of art in a British auction house, he is charged 17.5% VAT, even when it can be shown that it is an intra-Community acquisition. Exemption from VAT in the UK could only be obtained if a certificate from the VAT authorities was presented showing that the VAT on the intra-Community acquisition of the work of art had been included in the VAT return. This proof must be provided for each purchase and can only be issued after the VAT return has been made. 1. Is this procedure in accordance with the relevant European directives? 2. Can the exemption only be granted on the basis of the certificate issued by the administration? 3. Which VAT rate applies to intra-Community acquisitions? 4. Can VAT only be collected via the British government, which entails additional costs?
Answer
1 and 2. Pursuant to Article 28c(A) (a) of the Sixth Directive (Directive 77/388/EEC of 17 May 1977), supplies of goods dispatched or transported by or on behalf of the vendor or the customer from one Member State of the European Community to another Member State, carried out by a person other than a taxable person who is eligible for the exemption scheme provided for in Article 24 of the said Directive, are exempt from VAT. This exemption is only applicable insofar as the supply is made to another taxable person or to a non-taxable legal person acting as such, who are obliged in the Member State of arrival to subject their intra-Community acquisitions to tax (transposed into Belgian law in Article 39bis of the VAT Code). However, this exemption does not apply to works of art, which benefit from the special arrangements for second-hand goods, works of art, collectors’ items or antiques, as provided for in Article 26a of the above-mentioned Directive. The exemption in the Member State of departure is therefore subject to three conditions: 1. the goods are dispatched or transported outside the Member State of departure but within the Community; 2. the purchaser (by virtue of his status) is obliged to subject his intra-Community acquisitions to tax in the Member State of arrival; 3. the supply is not subject to the special system of taxation on the profit margin. The right to this exemption must, of course, be proven by the supplier who claims the exemption in the Member State of departure. The burden of proof that the above-mentioned conditions for the application of the exemption have been met therefore rests on him. However, it should be noted that the actual declaration of the intra-Community acquisition in the Member State of arrival is not a condition for the application of the exemption in the Member State of departure. If the seller is not convinced by the evidence available to him concerning the identity of the buyer or if he has doubts about the condition of transport or dispatch of the goods outside the Member State of departure, he may still refuse the application of the exemption as a matter of prudence. As for the question of issuing a certificate from the VAT authorities which should show that the VAT on the intra-Community acquisition of the art object is included by the buyer in the periodic VAT return as a condition for exempting the supply in Great Britain, it should be noted that such a condition is apparently not imposed by the British tax authorities. In any event, the systematic refusal by an auction house to grant exemption in the case described could, if necessary, be regarded by the competent European institutions as a condition which does not comply with the transitional VAT arrangements as established by Directive 91/680/EEC of 16 December 1991 supplementing the Community system of value added tax and amending Directive 77/388/EEC with a view to the abolition of fiscal frontiers (Official Journal L 376 of 31 December 1991, pp. 1 et seq.) and by Directive 92/111/EEC of 14 December 1992 amending Directive 77/388/EEC and introducing simplification measures with regard to value added tax (Official Journal L 384, 30 December 1992, p. 47 et seq.). 3. The intra-Community acquisition of an object of art is in principle subject to the standard rate of VAT, which currently amounts to 21%. When the intra-Community acquisition concerns works of art defined in item XXI, § 2, 1°, of Table A of the Annex to Royal Decree no. 20 of July 20, 1970 fixing the rates of value added tax and determining the distribution of goods and services according to these rates, the reduced VAT rate of 6% is however applicable provided that the seller in the Member State of departure of the shipment or transport of the acquired goods (a) is the author or a successor in title of the author; (b) or is a taxable person other than a taxable dealer, acting on an occasional basis, where such works of art have been imported by that taxable person himself or have been supplied to him by their author or by his successors in title or have entitled him to full deduction of value added tax. 4. The means of recovery of VAT which may be wrongly claimed in Great Britain is strictly a matter for British law. However, if the honourable member has a specific case in mind, I am quite prepared to have it examined – if necessary in cooperation with the British authorities – provided that the necessary information is made available to me.
