VAT and crypto: classify the transaction before calculating tax
Published 18/11/2025 · Updated 08/09/2026 · Houssen Issouf Aly, French chartered accountant
Crypto-assets · Companies · Directors
Practical guidance for companies and directors. Revised on 7 September 2026.
Crypto payment does not determine the VAT regime
A company may sell advice paid in Bitcoin, exchange assets for its own account and provide a technical service to a customer. The word crypto does not give these transactions one VAT treatment. Identify what is supplied, to whom and under which conditions.
Ask whether the asset is the payment method, the subject of an exchange service or a representation of particular rights. This avoids both automatically taxing every fee and exempting every blockchain-related activity.
Exchange and the underlying sale
Hedqvist, C-264/14 concerns Bitcoin/fiat exchange remunerated through a margin and finds the examined transactions exempt. French BOFiP guidance addresses tokens and exchange operations. Do not extend that conclusion without analysis to consulting, equipment sales or every platform service.
Five questions for the file
- What is supplied? Goods, services, exchange, rights or another flow: start with the contract and actual performance.
- Who acts, and in which capacity? Identify supplier, customer and intermediary. Separate economic activity from simple holding and proprietary funds from client funds.
- Where is the supply located? Review the customer’s status, relevant establishments and service. A wallet or server location is not a universal answer.
- Which regime applies? Taxable, exempt, small-business relief and outside scope mean different things. Document the applicable rule and any input VAT consequences.
- What amount and date matter? Identify consideration, valuation evidence and the relevant tax-point rules. A blockchain timestamp does not determine every tax date.
This framework helps assemble evidence. Bundled supplies and transactions whose nature differs between parties still require examination of the specific contract.
A payment example and the treatment of fees
Assumptions: a consulting service supplied in France is subject to 20% VAT and sold for €2,000 excluding VAT. The invoice totals €2,400, including €400 VAT. The client sends the agreed crypto equivalent. Immediate conversion produces €2,400 and the payment provider retains €24, leaving €2,376 in the bank.
The €24 does not remove part of the price invoiced to the customer. Reconcile the invoice, gross settlement, conversion statement, fee invoice and net receipt. Any VAT shown on provider fees needs its own assessment and supporting documents. The example assumes no additional conversion difference and does not cover every VAT regime.
The word fee does not determine the rate
Exchange remuneration, custody and a software subscription may appear in the same interface. Their commercial labels do not establish identical treatment. Examine what is supplied, by whom and where, and whether an exemption applies.
Token rights matter
A service-access token requires review of the rights and use conditions; the utility label alone does not fix the tax point. For historical NFT records, French guidance examines the underlying transaction. An EU customer does not automatically mean a uniform French VAT rate.
Documents and frequently asked questions
Keep contracts, invoices, customer identity and location evidence, payment records, provider statements and conversion methods. Separate sales, exchange, fees, internal transfers and other income. Explain differences between invoices and technical records.
Does software establish the regime?
It assists data processing. An imported label does not validate VAT classification. Test representative cases and document the decisions.
Is protocol income always outside scope?
Examine the activity, beneficiary and identifiable consideration. Staking, lending and farming are not sufficient labels for one universal answer.
Does electronic invoicing replace this analysis?
No. Format and transmission do not resolve classification. Our electronic invoicing guide connects invoices, payments and reconciliation.
What should I bring to a first meeting?
Prepare a complete example of each transaction type. Explore crypto payments for businesses or support for crypto service providers, then contact HODL to define the scope.