Posted: 26 Jan. 2022 5 min. read

VAT treatment of cryptocurrencies


Due to the increasing importance of cryptocurrencies in recent years, some VAT issues also arose in this context. In 2015, the ECJ ruled as regards the exchange of bitcoins in the Hedqvist judgment. The Austrian Ministry of Finance also published an information on the tax treatment of cryptocurrencies. Furthermore, the Tax Appeals Court has dealt with the topic of mining in a ruling from August 2021.

The ECJ ruling

The taxpayer intended to offer services in the form of exchanging traditional currencies into the virtual currency Bitcoin and vice versa. The Bitcoins are mainly used for payments between private individuals via the internet and in certain online shops that accept this currency. The Bitcoins are purchased from or sold to private individuals, companies, or to international exchange site. Purchasing and selling is done against conventional currencies such as - in the present case – the Swedish Crowns. In its ruling, the ECJ stated that the present case constitutes a supply of services for consideration. Furthermore, the ECJ examined whether the tax exemption for transactions involving foreign currency, bank notes and coins used as legal tender is applicable. The ECJ answered this question in the affirmative, detailing that the tax exemption would lose parts of its intended effects if it’s only applied to traditional currencies and not to Bitcoins too.

Information from the Ministry of Finance on crypto assets

The Ministry of Finance has published an information regarding the tax treatment of crypto assets, which was last updated on 1 January 2021. According to this information, the exchange of legal tender to Bitcoins or vice versa is exempt from VAT with reference to the Hedqvist ruling. The BMF also commented on the topic of Bitcoin mining and stated in this context that Bitcoin mining is not subject to VAT both due to the lack of identifiable service recipients and in light of the current ECJ case law.

Tax Appeals Court decision

According to the facts of the case, the complainant concluded service agreements with customers. The content of these agreements was the mining of cryptocurrencies for customers and the exchange of the mined cryptocurrency into Bitcoin or another cryptocurrency. According to the tax authorities, all sales of the complainant qualified as VAT exempt with regard to the Hedqvist case. The Tax Appeals Court, however, dealt in detail with the VAT treatment of mining activities. According to the Tax Appeals Court, a miner can, in principle, engage in an entrepreneurial activity, as the miner requires, for example, special equipment to produce cryptocurrencies. On the other hand,  the mining activity constitutes an irrational expectation regarding the expected success. The probability of success in mining is similar to that of a lottery. Therefore, mining is to be considered as gambling and falls under the VAT exemption regarding betting. It is not important in this context which one of the different mining variants (eg pool mining or cloud mining) is used. Regarding the exchange of cryptocurrencies, the Tax Appeals Court repeated the statements of the Hedqvist ruling.


Since the mining of cryptocurrencies currently gains social significance and there is still no case law on this topic, the appeal as regards the Tax Appeals Court ruling was admissible and has been filed.. Therefore, it remains to be seen whether the  Administrative High Court will confirm the statements of the Tax Appeals Court and whether the information of the Ministry of Finance will be adapted to reflect the Tax Appeals Court ruling. Moreover, the services provided in connection with cryptocurrencies are manifold. To date, case law has only dealt with the topics of exchange or mining of cryptocurrencies. However, there are other services that are offered in connection with cryptocurrencies, ie staking. It is therefore to be expected that Austrian courts will deal with further issues related to cryptocurrencies in the future.

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Mag. (FH) Verena Gabler

Mag. (FH) Verena Gabler

Partner Steuerberatung | Deloitte Österreich

Verena Gabler ist Partner im Bereich Steuerberatung und leitet die Tax Management Consulting Abteilung bei Deloitte Österreich. Die Umsatzsteuer-Spezialistin hat sich auf die Prozessberatung spezialisiert und unterstützt ihre Klienten bei der Entwicklung und Implementierung von Steuerkontrollsystemen. Dabei begleitet sie ihre Klienten bei der Analyse und Reduktion von steuerlich relevanten Risiken, der Optimierung von Prozessen und der Erhöhung des Automatisierungsgrades der Steuerfunktion durch den Einsatz von steuerrelevanter Software.