Taxing the Intangible: The EU VAT Directive Will Survive the Blockchain!

The rise of blockchain technology and crypto-assets presents both conceptual and practical challenges for the EU VAT system. This article critically examines whether the current EU VAT Directive is sufficiently equipped to handle transactions involving cryptocurrencies. Contrary to claims that the new technology demands radical legislative reform, the authors argue that the VAT Directive’s core structure is surprisingly resilient. However, its implementation – particularly through the VAT Implementing Regulation – requires targeted updates to ensure legal certainty, enforceability, and neutrality across Member States. Drawing on doctrinal analyses, Court of Justice of the European Union (CJEU) case law, and practical examples, the authors assess key issues such as taxable person status, exemptions for financial services, valuation in token-based transactions, and the right to deduct input VAT. In addition, the authors conclude by proposing a novel approach of treating utility tokens as VAT vouchers which could offer a more coherent and administrable framework for token-based business models.