How can a seller determine from which country the buyer mints and if the seller cannot determine that, do Value Added Taxes apply to a commercial sale?

Select jurisdiction

  • Germany
  • France
  • Brazil


Minting on Mainnet is possible without knowing anything about the buyer except for the public key.
However, from a tax perspective, this is not recommended. A know-your-customer process should be
implemented via a third-party in order to know the customer and where he resides.
Whether or not Value Added Taxes applies to a certain NFT is determined for every NFT by the
German VAT law. This qualification is not dependent from the fact that the customer might be
unknown. Consequently, sellers who need to pay VAT cannot excuse themselves by the fact that they
do not know their clients. This is the problem of the seller if they do not know where their customers
reside. We haven’t seen reactions by the German Tax Authorities yet. But realistically – their job is to
collect as many taxes as possible. Likely they would take the position that from a German seller all
NFTs were bought in Germany and also German VAT on all of them would come due. This must not
be the right VAT qualification, but Tax Authorities could follow this approach.

Florian Zawodsky



For VAT purpose, sales of NFT can be considered as "electronically supplied services" as
such operations are delivered over the Internet and largely automated insofar as the sales
are carried out automatically, the human intervention is minimal as it is not required for each
sale but only for the setting on line of series of NFT and the service could not exist in the
absence of information technology.
In accordance with the regime of electronically supplied services, the place of taxation for
VAT purposes should be the place of residence of the customer (non-taxable person),
provided that the customer's place of residence can be identified. To determine the place of
residence, the seller can use general presumption allowing to identify the location of the
customer on the basis of two items on non-contradictory evidence as listed in the Council
Implementing Regulation (EU) No 282/2011 (non-exhaustive list). For example, billing
address, IP address, Mobile Country Code (MCC) or "other relevant commercial information"
can be used.
If the seller cannot determine the place of location, VAT still needs to be applied and the
place of taxation for VAT should be the place where the seller has his registered office at the
time of sale.

Clément Herr

Tax and international tax


There is no Value Added Tax in Brazil.

Fabio Cendão

Intellectual Property and Innovation

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