Currencies in Video Games Are Not Means of Payment for VAT Purposes
The case involved an entity trading “gold” from the RuneScape game, which argued that such activity should fall under the VAT exemption applicable to financial services. The CJEU disagreed.
The ruling is already considered an important signal for the entire gaming industry, where virtual currencies are widely used.
Facts of the Case and the Taxpayer’s Arguments
A Lithuanian company was acquiring and reselling virtual “gold” from RuneScape. The tax authorities found that the income generated exceeded the VAT registration threshold and that the transactions were subject to taxation. However, the taxpayer argued that the sale of “gold” should be treated as a transaction involving a virtual currency of a financial nature and thus benefit from the exemption under Article 135(1)(e) of the VAT Directive.
The CJEU rejected this line of argument, emphasising that a virtual currency may qualify for VAT exemption only if both of the following conditions are met:
- It is accepted as an alternative means of payment to legal tender, and
- It has no purpose other than serving as a means of payment.
In the case of RuneScape, neither of these conditions was fulfilled - the virtual “gold” can be used exclusively within the game and is not accepted outside its environment.
CJEU’s Conclusions
The CJEU clearly held that:
- RuneScape “gold” is not a currency,
- It does not meet the criteria for recognising the transaction as a financial service,
- Trading in such virtual goods is an electronically supplied service taxed under the general rules.
The Court also highlighted that a video game imposes restrictions on the use of virtual goods and that players do not own them - they merely hold a user licence. This also stems from RuneScape’s terms of use and was one of the arguments confirmed in industry and tax-law analyses.
Commentary by Szymon Lipiński from Crowe Poland
“The CJEU’s ruling is a clear signal for the gaming industry: virtual currencies used solely within a game environment cannot benefit from the VAT exemption applicable to financial services. This means the need for more detailed analysis of operational and tax models in projects involving purchases of virtual currency.”
In Lipiński’s view, although the general stance of the CJEU is unambiguous, this does not rule out the possibility that in certain circumstances game publishers creating complex marketplaces might develop trading mechanisms that meet the VAT exemption criteria. The key factor is the economic and legal structure of the exchange system.
“It is advisable for gaming studios and platform operators to review their VAT settlements - especially where virtual currency may have payment-like functions and is exchangeable within a broader ecosystem of services,” he adds.
Implications for the Gaming Industry
The judgment has significant practical implications:
- it confirms that the purchase of virtual currencies in games constitutes a fully taxable service,
- it eliminates the possibility of broadly applying the VAT exemption to such transactions,
- it reinforces the need to analyse whether a currency has a payment function beyond the game itself.
The industry, which increasingly develops advanced digital ecosystems and marketplaces, should note that the CJEU applied very strict criteria based on earlier case law (including Hedqvist, C‑264/14).
Recommendations for Gaming Companies
- Conduct an analysis of models for selling in‑game currencies and items.
- Verify how transactions are documented and accounted for.
- Assess whether the currencies in the system have the characteristics of a means of payment or are solely gameplay elements.
- In borderline cases, consider obtaining a tax ruling.
Summary
The CJEU judgment of 5 March 2026 in case C‑472/24 confirms that virtual currencies used exclusively within a game environment cannot be treated as means of payment within the meaning of VAT legislation.
Consequently, the sale of virtual currencies is a taxable electronically supplied service. For the gaming sector, this is a clear signal that business models based on virtual currency payments must be carefully analyzed from a VAT compliance perspective - especially where platforms create more advanced marketplaces in which digital currency functions may resemble payment mechanisms. The judgment does not entirely close the discussion but sets strict criteria that must be met.