The CJEU clarifies the VAT treatment of the exchange between a video-game virtual currency and traditional currencies

The CJEU, in its judgment of 5 March 2026 (case C-472/24, Second Chamber, MB Žaidimų valiuta), has clarified the VAT treatment of digital assets whose circulation is confined to a closed environment.

The Court reaches two conclusions. First, the exchange of real money for the virtual currency of an online video game does not qualify for the exemption in article 135(1)(e) of Directive 2006/112/EC —the provision exempting transactions in currency and legal tender from VAT—.

Second, that virtual currency is not a multi-purpose voucher under article 30a of the Directive either. In other words, it is not an instrument giving the right to goods or services whose specific identity remains to be determined when the transaction takes place.

The consequence for the operator is direct: the taxable amount is the total consideration received for the sale, under the general rule in article 73 of the Directive.

The case concerned a Lithuanian company whose business was buying and reselling the virtual currency Gold of the video game Runescape in exchange for traditional currencies. The Lithuanian tax inspectorate treated the activity as a supply of services subject to VAT on its full amount and assessed the tax, with interest and a penalty.

As its main argument, the company relied on Hedqvist to claim the exemption for non-traditional currencies. In the alternative, it argued that Gold was a multi-purpose voucher outside the scope of VAT; and, in any event, that the taxable amount should be limited to the margin between the purchase and sale prices.

The judgment has to be read against Hedqvist. In that judgment of 22 October 2015 (case C-264/14), the CJEU held that exchanging bitcoin for traditional currencies was exempt from VAT. To reach that conclusion, the Court treated bitcoin as a non-traditional currency, that is, a digital means of payment other than legal tender.

As the Court now formulates it, however, the exemption requires two cumulative conditions. First, the currency must have been accepted by the parties to a transaction as an alternative to legal means of payment. Second, it must have no purpose other than that of a means of payment.

Applying those conditions to the case, Gold does not meet them. The currency has no purpose other than being used in the video game and is not accepted outside it as a means of payment for real goods or services.

A further point reinforces the conclusion: the game’s own terms deny the player ownership of in-game items, including Gold itself. Strictly speaking, the player does not hold a tradable asset; he is the user of a service.

The Court’s reasoning on the multi-purpose voucher point is clearer still. Article 30a of the Directive defines a voucher as an instrument that must be accepted as consideration for a supply of goods or services and where the goods or services to be supplied, or the identities of the potential suppliers, are indicated on the instrument itself or in related documentation. A voucher is multi-purpose —rather than single-purpose— where the place of supply or the VAT due is not known when it is issued.

Gold does not meet the first element of that definition. It is not an instrument giving access to later, as yet unspecified consumption; it is itself what is consumed: it gives access to certain functions within the game, and supplying it is, in the Court’s view, an electronically supplied service.

The technical difference is decisive. A voucher defers the economic effects to future consumption; Gold produces them immediately.

In our view, the judgment consolidates the line opened by Hedqvist without going beyond it. What remains decisive is acceptance as an alternative means of payment and the absence of any purpose other than payment.

It follows, in our view, that crypto-assets which meet those conditions —bitcoin in particular— fall outside the Court’s reasoning and in principle retain the exemption derived from Hedqvist. For other crypto-assets with functions beyond payment, the second condition will call for a case-by-case analysis.

The judgment offers, in our view, a criterion that can reasonably be applied to other closed-use digital assets —platform utility tokens (digital units usable only within a specific platform) and in-platform currencies—, although its operative part is confined to the currency of a video game that gives access to in-game functions.

It is therefore relevant to operators of digital platforms and video games and to issuers of utility tokens with customers established in Spain, who should review the VAT characterisation of the exchange transactions they manage, as well as the passing on of the tax to the end user.

In short, the CJEU confirms that where the two cumulative Hedqvist conditions are not met —acceptance by the parties as an alternative to legal means of payment and no purpose other than that of a means of payment—, the transaction is not exempt and the taxable amount is, under article 73 of the Directive, the full sale price.