Representing client in the CJEU regarding interpretation of “virtual coins” for tax purposes

Our firm represented a client in a highly innovative tax dispute. The client, a Lithuanian company, was engaged in the international trade of virtual in-game items, “gold coins”, used in the virtual environment of one of the most popular internet games. The dispute related to the treatment of such “gold” for VAT purposes.

Since there were no specific legal provisions, case law, or official commentaries on such matters, the authorities and judiciary were uncertain. The main question was whether it was a virtual currency, a multi-purpose voucher, a service token, or something else.

The Commission on Tax Disputes agreed with our request and referred the matter to the Court of Justice of the European Union. The outcome of the dispute will have a significant impact on the taxation of the virtual world, which is evidently becoming more important with each passing day.