In a recent binding consultation, lhe General Directorate of Taxes, dependent on the Ministry of Finance in Spain, established that both businessmen and professionals and artists who produce and sell NFTs in the country must “assume in operations the payment of Value Added Tax (VAT) at the rate 21% overall,”As the digital medium made it known Five days.
According to its statement of reasons, the General Directorate of Taxes states that the purpose of the sale is not the illustrations as such, but the non-fungible tokens that the buyer establishes “Rights Of Use”but not the rights underlying the ownership of the work itself.
“What is going to be transmitted through the corresponding online platforms is the NFT itself and not the underlying digital file,” Tributos points out.
Therefore, the consultation carried out by the agency before the Ministry of Finance is based on what type of VAT a “Physical person” that is dedicated to the sale of these illustrations that have been modified with applications such as photoshop.
under this line, The General Directorate of Taxes states in the text that, “NFTs are digital certificates of authenticity that, through blockchain technology, are associated with a single digital file., adding that it is understood that it can be everything that it can “represent yourself digitally”, such as an image, music, video or a work of art, among others, being the most common crypto assets among the artistic industry.
In addition to that, The text indicates that what this entails is that these sales must be taxed at the general rate of 21%, and do not have the option of benefiting from the reduced VAT of 10%, which they do enjoy, for example, traditional construction works operations. art.
Julio Ransés Pérez Boga, president of the Professional Association of State Treasury Inspectors, considers the analysis carried out by the body in this regard to be correct and points out that this criterion would have been the opposite if the sale of the digital files were selling the rights to intellectual property of it.
“By selling an NFT, the use is being granted to the buyer, but not the right to the property. We are talking about a provision of services, in this case digital, so the corresponding rule is applied and it must be taxed at the general rate.
For her part, Enca Baquero, member responsible for training at the Spanish Association of Tax Advisors (Aedaf) and partner responsible for the tax area of Certus, explains that applying one type of VAT or another will depend on the “nature of the asset that is transmitted”.
“Tributos is making it clear in its explanations that it takes into account the transmission of the certificate, not the property rights that it may carry.” Under this premise. The Treasury concludes that “the sale of NFTs can be considered a transmission of electronic goods”, which are taxed at the general rate”, explained the head of Aedaf.
It also indicates the criteria to be followed by Taxes in operations between the company and the user, if the acquirer is in Spain, the general rate of 21% must be passed on. Now, if it is located in another region of the European Union, the tax to be applied will be the Spanish rate or that of the buyer’s country of residence, “in this case, liquidating the VAT with the single window mechanism depending on whether the transaction exceeds 10,000 euros. On the other hand, if the purchaser resides in a third country, the transaction is exempt from VAT.
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