ECJ judgments

Can a VAT-exempt currency transaction be concluded using value-bearing “game currency”?

Case C-472/24 – MB “Zaidimų valiuta”

The exchange of a virtual means of payment that can be used exclusively within an online video game into traditional currency, or vice versa, cannot qualify as a VAT-exempt currency transaction.

The VAT treatment of transactions involving “assets” that exist only virtually yet have value remains uncertain to this day. In Case C-472/24, the CJEU examined, from a VAT perspective, a means of payment referred to as “gold” used in an online video game called “Runescape”. This “gold” can be traded for real money; however, it may only be used within the game, is not accepted as a means of payment in the real economy, and cannot be redeemed for goods or services of value. MB “Zaidimų valiuta”, which carried out transactions involving such “gold”, treated the sale and exchange of the in-game currency as VAT-exempt financial transactions relating to currency. In contrast, the Lithuanian tax dispute commission took the view that such transactions are subject to VAT. MB “Zaidimų valiuta” challenged the decision before the courts, and the national court referred the matter to the CJEU for a preliminary ruling.

In its judgment, the CJEU clarified that two conditions must be met for a transaction to qualify as a VAT-exempt currency transaction. First, the currency in question must be accepted as legal tender. Second, the currency must have no purpose other than serving as a means of payment. These conditions are not met in the case of the “gold” at issue, as it constitutes merely an in-game means of payment, in respect of which users do not acquire ownership rights under the terms and conditions of the game. Accordingly, trading in such “gold” and related exchange transactions cannot fall within the scope of VAT-exempt currency transactions.

The CJEU further examined whether the “in-game gold” could qualify as a multi-purpose voucher. It answered this question in the negative, reasoning that, within the VAT system, an instrument qualifies as a voucher only if it is accepted as consideration, in whole or in part, for the supply of goods or services, and if the goods or services to be supplied or the identity of the potential suppliers are indicated either on the instrument itself or in the related documentation. Since the “gold” in question cannot leave the virtual environment of the game, it is not capable of being used to settle consideration for goods or services in the real economy; therefore, the rules applicable to vouchers cannot be applied.

Full English text of the judgement

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