#Crypto42 Token Summit Crypto-Token Taxation (Tina Ehrke-Rabel)

1. Crypto-TOKEN
Taxation
Tina Ehrke-Rabel
full-time professor at
Karl-Franzens-Universität Graz
leading partner of the research project „Kryptostaat“
Research fellow of the UCL Institute for Blockchain-Research

2. How does tax law approach new technologies?
SUBSTANCE OVER FORM!!!!!!!!
What is really going on?
What do/did the parties involved intend to do/ achieve?
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3. Types of token
According to their „creation“ According to the rights they confer to
their holders
• Mining – decentralized or even distributed
accumulation of powers
• No right at all
• Sale by an economic entity • Means of payment (like bitcoin)
• Right to purchase goods or services
• Right to participate in the profits / turnover
• Entitlement to repayment with interest
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4. Tax issues
• In taxation there need to be in general two parties
– The one who issues/sells/ offers/ a good or service
– The one who accepts the gift or pays for the good or service
(either with a pure means of payment or by barter)
 Tax consequences might occur for both parties
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5. Taxation of mining
• Does the mining of cryptocurrencies constitute an economic
activity?
– For whom?
• For the miner?
• For the one who offers the mining opportunities?
– Is there a „one“ able to do so?
• If it does not constitute an economic activity, is it a game?
– Are games relevant for taxation?
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6. Taxation of the initial sale of Tokens
• Depends on the rights the token confers on its holder
– Token as a gift certificate
• For the vendor
– Taxable income (if not an exempt charity)
– Taxable turnover (VAT, if not exempt from VAT)
• For the purchaser
– Nothing if a private person
– Deductible expense if specific deduction under national
income tax law
– Not taxable for VAT
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7. Taxation of the initial sale of Tokens
• Depends on the rights the token confers on its holder
– Token as a general means of payment (comparable Bitcoin)
• For the vendor
– Taxable income
– Not subject to VAT
• For the purchaser
– Nothing if a private person
– To be treated like the exchange of one currency into another
for income tax purposes?
– Not taxable for VAT (because treated like the exchange of
currency)
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8. Taxation of the initial sale of Tokens
• Depends on the rights the token confers on its holder
– Token as a right to participate in the profits/ turnover
• For the „vendor“
– Equity tax neutral
– Not subject to VAT
– Right to deduction of VAT if economic activity subject to VAT
• For the purchaser
– Security
» Participation in profits/turnover subject to income tax
» No VAT
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9. Taxation of the initial sale of Tokens
• Depends on the rights the token confers on its holder
– Token as a right to acquire in the future services or goods
• For the „vendor“
– voucher
» Subject to VAT
» Subject to income tax
– At which moment?
» At the moment of transfer of the token?
» At the moment, the purchaser „asks“ for the service or
good
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10. Taxation of sale of Tokens on
the „secondary“ market
• Depends on the rights the token confers on its holder
– In general to be treated like the initial sale
– Exception?
• VAT on vouchers
– According to a decision of the CJEU (Astra Zeneca) the sale of
any voucher (even multi-purpose) constitutes a separate
provision of services taxable at the moment of the sale
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11. Univ.-Prof. Dr. Tina Ehrke-Rabel
Institut für Finanzrecht
Universität Graz
tina.ehrke-rabel@uni-graz.at
Tel: +43 316 380-3430
THANK YOU!
Contact
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