ECJ Clarifies VAT Treatment of In Game Virtual Currency (Case C 472/24, MB “Žaidimų valiuta”)

On 5 March 2026, the Court of Justice of the European Union (ECJ) delivered its judgment in Case C‑472/24, MB “Žaidimų valiuta”, providing important clarification on the VAT treatment of transactions involving virtual money used exclusively within online games.

The Court ruled that the sale of “Gold”, the virtual currency of the online game Runescape, does not qualify for VAT exemption under Article 135(1)(e) of the VAT Directive and does not constitute a voucher under Article 30a. As a result, VAT must be accounted for on the full consideration received for such transactions.

This judgment draws a clear distinction between game‑specific virtual currencies and other forms of virtual assets, such as cryptocurrencies and has significant implications for businesses engaged in the trading of in‑game currencies.

How the Case Arose

The case arose from a preliminary ruling request submitted by the Tax Disputes Commission under the Government of the Republic of Lithuania following a tax audit of MB “Žaidimų valiuta”, a Lithuanian company whose principal activity consisted of buying and reselling the virtual currency “Gold” used in the online game Runescape.

During a tax inspection covering the fiscal periods 2020 – 2023, the Lithuanian tax authorities determined that the company’s exchange of traditional currencies for “Gold” constituted taxable supplies of services subject to VAT. As VAT had not been declared or paid, additional VAT, interest and penalties were assessed.

MB “Žaidimų valiuta” challenged this decision, arguing that:

• “Gold” should be treated as a virtual currency, and that its exchange should therefore be VAT‑exempt, by analogy with the ECJ’s decision in Hedqvist (C‑264/14) concerning Bitcoin or
• Alternatively, “Gold” should be regarded as a multi‑purpose voucher, meaning VAT should be due only on the margin rather than the full value of the transaction.

The referring court noted that players of Runescape do not legally own the “Gold”, but that it confers certain in‑game rights and functionalities. Against this background, clarification was sought from the ECJ on the correct VAT treatment of these transactions.

The ECJ’s Decision and Reasoning

VAT Exemption under Article 135(1)(e):

The ECJ confirmed that VAT exemptions must be interpreted strictly, given that they are derogations from the general principle that VAT applies to all supplies for consideration.

Referring to its judgment in Hedqvist, the Court reiterated that non‑traditional currencies may qualify for exemption only where two cumulative conditions are met:

• the currency must be accepted as an alternative to legal tender; and
• it must have no purpose other than to function as a means of payment.

Applying these criteria, the Court held that “Gold” fails both tests. It can be used only within Runescape, has no acceptance outside the game, and cannot be used to obtain real‑world goods or services. In addition, transactions involving “Gold” are not financial transactions and do not fall within the VAT exemption under Article 135(1)(e).

Voucher Classification and Taxable Amount:

The Court then examined whether “Gold” could qualify as a voucher under Article 30a of the VAT Directive. While “Gold” does give access to certain in‑game functionalities, the Court found that it does not entitle the holder to a future, separate supply of goods or services.

Instead, the virtual currency itself constitutes the consumable electronic service, forming an integral part of the game. As such, it cannot be regarded as a voucher for single‑purpose or multi‑purpose use.

The Court therefore concluded that transactions involving “Gold” constitute taxable supplies of electronic services, and that VAT must be levied on the full consideration received, in accordance with Article 73 of the VAT Directive, rather than on any margin or price difference.

Conclusion

The ECJ’s judgment provided clarity on the VAT treatment of in‑game virtual currencies and draws a clear boundary between cryptocurrencies and game‑specific digital assets.

Businesses engaged in the purchase and resale of virtual money used exclusively within online games should carefully review their VAT treatment in light of this decision. The judgment confirms that such transactions are fully VAT‑taxable, with no exemption and no scope for margin taxation under the voucher rules.

More broadly, the decision reinforces the Court’s commitment to consistency, fiscal neutrality, and strict interpretation of VAT exemptions, ensuring a uniform application of EU VAT law across Member States in an increasingly digital economy.