The taxation of NFTs lacks consistency

The IPP Administration equates the NFT to a currency while the VAT Administration treats it as a work of art. Hence the different tax treatment.

If you decide on a whim to buy Wout Van Aert’s NFT crosses the finish line as winner on the Champs Élysées or atop Mont Ventoux during the Tour de France 2021, you will only have to pay 47,000 euros.

For the uninitiated, NFTs (non-fungible tokens) are digital property certificates. They certify the ownership of a work or a virtual object. Like bitcoin, they use blockchain technology and are the subject of a speculative craze.

If you have really substantial means, you could aim for the single card of Kylian Mbappe arms crossed, sold at auction in May 2022 for 416,000 euros.

On the other hand, if you want to resell this NFT or have your children inherit it, you will have to go through the taxman. However, the tax treatment of NFTs remains relatively unclear for the time being. In our issue of May 7, 2022, we have already provided an overview of this tax treatment. But in the meantime, the practice of the administration and the new copyright regime have somewhat changed the situation.

Tax qualification difference

What raises questions is above all the tax qualification of the NFT given by the administration. “There is an asymmetry between on the one hand the qualification of the NFT by the Personal Income Tax Administration, which treats it as a currency, which suits him, and on the other hand the qualification of the NFT of the VAT administration, which equates the NFT to a work of art and not a currency, which also suits him well”, observes Grégory Homans, lawyer, managing partner of the Dekeyser & Associés firm.



“This difference in qualification appears to be driven by a choice of fiscal opportunity.”

Gregory Homans

Lawyer (Dekeyser & Associates)

In fact, by considering the NFT as a currency (and not as a work of art), the administration of natural persons can tax the realized capital gain. On the contrary, by assimilating the NFT to a work of art (and not to a coin), the VAT administration can, in some cases, collect the VAT (21%). “This difference in qualification seems to be driven by a choice of fiscal opportunity. It is notably empowered by the absence of a specific legal and tax framework for NFTs. This asymmetry calls into question the coherence of the system proposed by the taxman”, believes Grégory Homans.



“To be eligible for the copyright regime, the seller of the NFT must be the original author.”

Gregory Homans

Lawyer (Dekeyser & Associates)

Capital gains and copyright reform

If one were to regard the NFT as a work of art, a portion of the NFT sale price could in principle benefit from the favorable tax regime on copyright. However, the interest of this qualification must now be tempered, according to Grégory Homans. Because in the meantime the copyright regime has been revised. “Since 1um January 2023, the scope of this favorable regime was significantly limited. For example, only the author (and his heirs or legatees) can benefit from the favorable copyright regime. In other words, to be eligible for the copyright regime, the seller of the NFT must be the original author.

If, on the other hand, the NFT is considered a cryptocurrency (such as Bitcoin), the individual seller will, depending on the specifics of his situation, is totally exempt from tax on realized capital gains if he has invested in a good family man, be taxed as other income on this capital gain (fixed rate of 33%) if invested for speculative purposes, artbe taxed as professional income (progressive rate up to 50%) if you are a professional investor.



Tax authorities have more and more information about virtual assets.

Seals: caution

Finally, in matters of inheritance, Me Homans advises prudence and transparency. “Since it is a virtual asset, some might be tempted not to include it in the declaration of inheritance. But that would mean forgetting the intensification of information exchanges in terms of crypto-assets.. Tax authorities have more and more information related to these virtual assets. In times of crisis, they pay close attention to us.”

Especially since a European directive (“DAC 8”) which further intensifies the automatic exchange of information between tax authorities in relation to digital assets (including NFTs) is expected to come into force soon. This directive is part of the Declarative Framework Applicable to Crypto-assets (CARF) published by the OECD on October 10, 2022.

The summary

  • The tax qualification of the NFT given by the administration raises questions.
  • The PPI administration identifies the NFT with a currency while the VAT administration considers it a artwork.
  • To benefit from the favorable copyright regime, the seller of the NFT must be the original author.
  • In matters of inheritance, it is better transparency game towards the taxman.

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