In a most current judgment, the European Court of Justice - following a request for a preliminary ruling from the Republic of Lithuania - decided that transactions involving the exchange of currency for virtual money in an online game do not meet the criteria for VAT exemption under Article 135 (1) Letter e of the VAT Directive. The court further emphasized that gold does not constitute a “voucher” and that therefore the entire proceeds from the sale is subject to VAT.
Transactions made in exchange for redeemable play money as part of an online game in virtual space are subject to VAT. This was decided by the Cologne Fiscal Court in August 2019. The final decision of the Supreme Tax Court is expected soon due to the fact that the case has now been pending since January 2020.
