Court of Justice 16 July 2015, C-264/14 (Skatteverket v David Hedqvist.)

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Advocate General Kokott opines that the exchange of a virtual currency, such as bitcoin, for a conventional currency for consideration constitutes a supply of services for VAT purposes under Article 2(1)(c) of Directive 2006/112/EC. The Opinion argues that such transactions should be exempt from VAT pursuant to Article 135(1)(e) of the Directive, as bitcoins function as a pure means of payment and should be treated similarly to legal tender to ensure fiscal neutrality. Conversely, the exemptions for transactions in securities under Article 135(1)(f) and negotiable instruments under Article 135(1)(d) are considered inapplicable to these virtual currency exchanges.AI