Spain Confirms VAT Applies Only Upon Redemption of Utility Tokens (Ruling V1003-25)
- Business Expats
- Oct 23
- 2 min read
In its Binding Ruling V1003-25 (12 June 2025), Spain’s General Directorate of Taxes (DGT) has clarified the VAT treatment of utility tokens, confirming that VAT only applies when the token is redeemed for a specific good or service — not when issued or traded.
This interpretation aligns Spanish practice with EU Directive 2016/1065 and provides much-needed clarity for Web3 and digital-asset projects operating under the EU VAT framework.
Utility Tokens Are Not Electronic Money
The DGT examined a case involving a company issuing tokens to access subscriptions, online courses, and physical products within its own platform.
It concluded that these tokens do not qualify as electronic money, since they operate within a closed ecosystem and cannot be used as a general means of payment.
Therefore, they do not benefit from the VAT exemption under Article 20.One.18º of the Spanish VAT Law (LIVA) — which applies to financial and currency transactions.
Instead, the Authority analyzed their nature under the EU voucher regime.
Tokens Classified as Multi-Purpose Vouchers (MPVs)
Under Directive (EU) 2016/1065, vouchers entitle the holder to certain goods or services, provided the type of good/service or supplier is identifiable.
Because these tokens could be used for multiple products and services, and the VAT rate or place of supply was unknown at issuance, the DGT classified them as multi-purpose vouchers (MPVs).
Implication:
VAT is not due at issuance or resale, but only upon redemption — when the actual taxable supply occurs.
VAT Triggered Only Upon Redemption
VAT liability arises when the token is redeemed, i.e., when the holder exchanges it for a taxable good or service.
Until then, issuance and intermediate transfers remain outside the scope of VAT.
However, any margin or commission earned by intermediaries distributing the tokens is subject to VAT as a taxable service.
This approach aligns with CJEU case law (C-637/20 DSAB, C-68/23 M-GbR), confirming that VAT applies only once the underlying taxable supply is identified.
Business Expats Insight
Spain’s interpretation brings legal certainty for token issuers, Web3 developers, and fintech innovators designing tokenized ecosystems across Europe.
It reinforces that utility tokens are not financial instruments but rather voucher-type assets, where VAT is deferred until redemption.
For issuers and investors, this means that token design, documentation, and flow mapping are now central to VAT compliance.
"At Business Expats, we help digital-asset businesses structure tokenized operations that are fiscally efficient, legally compliant, and aligned with EU regulatory frameworks"
In the evolving world of digital assets, VAT starts with the token’s design — not its sale.
Need guidance on VAT and crypto taxation in Spain?
Schedule a free consultation with our Digital Assets & International Tax team.
Contact us and schedule a free consultation with us at BusinessExpats.com
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