# Skatteverket v David Hedqvist (C-264/14) — VAT exemption for bitcoin/traditional-currency exchange (fintech / crypto) URL: https://consilena.com/coverage/laws/ksrc_kh664c0y09amfzjw - Jurisdiction: European Union - Type: Case - Identifier: EU:C:2015:718 - Current as of: 22 October 2015 - Provisions: 1 - Official text: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62014CJ0264 > The library is a research copy. Check the official source before relying on a provision: the text published there, not the copy in Consilena, is the law. ## Provisions - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 By its first question, the referring court asks, in essence, whether Article 2(1)(c) of the VAT Directive must be interpreted as meaning that… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Having doubts as to whether one of those exemptions applies to such transactions, the Högsta förvaltningsdomstolen (Supreme Administrative… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The Skatteverket appealed against the Revenue Law Commission’s decision to the Högsta förvaltningsdomstolen (Supreme Administrative Court)… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Nevertheless, the interpretation of those terms must be consistent with the objectives pursued by the exemptions laid down in Article 135(1) of… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Where there are linguistic differences, the scope of the expression in question cannot be determined on the basis of an interpretation which is… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 As regards, in the second place, the exemptions laid down in Article 135(1)(e) of the VAT Directive, that provision provides that Member States… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The Court has already held that it is irrelevant, for the purposes of determining whether a supply of services is effected for consideration… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Under Chapter 3 of that law, Paragraph 23(1) provides that bank notes and coins used as legal tender, with the exception of collectors’ items… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 As regards, in the second place, the supply of services for consideration, it must be recalled that a supply of services is effected ‘for… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 In that regard, it must be recalled that the concepts used in that provision must be interpreted and applied uniformly in the light of the… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The referring court considers that it can be inferred from the judgment in First National Bank of Chicago (C‑172/96, EU:C:1998:354) that… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Furthermore, as the Advocate General observed in points 51 and 52 of her Opinion, that provision does not cover transactions that involve money… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The request has been made in proceedings between the Skatteverket (Swedish tax authority) and Mr Hedqvist concerning a preliminary decision… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The transactions that Mr Hedqvist intends to carry out are thus limited to the purchase and sale of ‘bitcoin’ virtual currency units in… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Consequently, it must be held that Article 135(1)(e) of the VAT Directive also covers the supply of services such as those at issue in the main… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 In that regard, it is clear from the Court’s case-law that the purpose of the exemptions laid down in Article 135(1)(d) to (f) of the VAT… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Article 2 of the VAT Directive provides: ‘1. The following transactions shall be subject to VAT: (a) the supply of goods for consideration… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Article 24(1) of that directive is worded as follows: ‘“Supply of services” shall mean any transaction which does not constitute a supply of… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 It is clear from the wording of Article 135(1)(d) of the VAT Directive, read in the light of the judgment in Granton Advertising (C‑461/12… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Therefore, transactions such as those in the main proceedings do not fall within the scope of the exemptions provided for under that provision. - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The transactions exempted under that provision are thus defined according to the nature of the services provided. In order to be regarded as… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 It is also established case-law that the terms used to specify those exemptions are to be interpreted strictly, since they constitute… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Article 135 of the VAT Directive provides: ‘(1) Member States shall exempt the following transactions: … (d) transactions, including… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 As regards, finally, the exemptions laid down in Article 135(1)(f) of the VAT Directive, it suffices to recall that that provision covers… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 As is recalled in paragraphs 36 and 37 of this judgment, the exemptions laid down by Article 135(1)(e) of the VAT Directive are intended to… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 It must be held, first, that the ‘bitcoin’ virtual currency with bidirectional flow, which will be exchanged for traditional currencies in the… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The ‘bitcoin’ virtual currency, being a contractual means of payment, cannot be regarded as a current account or a deposit account, a payment… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 In a decision of 14 October 2013, the Revenue Law Commission found, on the basis of the judgment in First National Bank of Chicago (C‑172/96… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Having regard to the foregoing considerations, it must be held that transactions such as those at issue in the main proceedings, constitute the… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 According to the order for reference the ‘bitcoin’ virtual currency is used, principally, for payments made between private individuals via the… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 It therefore follows from the context and the aims of Article 135(1)(e) that to interpret that provision as including only transactions… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Transactions involving non-traditional currencies, that is to say, currencies other than those that are legal tender in one or more countries… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The referring court states that the transactions envisaged by Mr Hedqvist would be carried out electronically via the company’s website. That… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 As a preliminary point, it should be borne in mind that, in accordance with the Court’s case-law, the exemptions laid down in Article 135(1) of… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 As the Advocate General observes at points 31 to 34 of her Opinion, the various language versions of Article 135(1)(e) of the VAT Directive do… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 In the case in the main proceedings, it is clear from the material in the case file submitted to the Court that there would be a synallagmatic… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 The same is true for traditional currencies, since it involves money which is legal tender (see, to that effect, judgment in First National… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Mr Hedqvist wishes to provide, through a company, services consisting of the exchange of traditional currency for the ‘bitcoin’ virtual… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Before starting to carry out such transactions, Mr Hedqvist requested a preliminary decision from the Revenue Law Commission in order to… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 By its second question, the referring court asks, in essence, whether Article 135(1)(d) to (f) of the VAT Directive must be interpreted as… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: Article 135(1)(e) of the VAT Directive must be interpreted as meaning that the supply of services such as those at issue in the main proceedings, which consist… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Consequently, the answer to the first question is that Article 2(1)(c) of the VAT Directive must be interpreted as meaning that transactions… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 In the case in the main proceedings, it is common ground that the ‘bitcoin’ virtual currency has no other purpose than to be a means of payment… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 It is common ground that the ‘bitcoin’ virtual currency is neither a security conferring a property right nor a security of a comparable nature. - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Mr Hedqvist submits that the appeal by the Skatteverket should be dismissed and the preliminary decision by the Revenue Law Commission should… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Moreover, the transactions exempt from VAT under those provisions are, by their nature, financial transactions even though they do not… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Referring to a 2012 report by the European Central Bank on virtual currencies, the referring court states that a virtual currency can be… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Also under Chapter 3, Paragraph 9 provides that supplies of banking and financial services and transactions involving securities and similar… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 According to the Revenue Law Commission, the ‘bitcoin’ virtual currency is a means of payment used in a similar way to legal means of payment… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Consequently, the transactions at issue in the main proceedings, which consist of the exchange of different means of payment, do not fall… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Furthermore, as Mr Hedqvist submitted, in essence, at the hearing, in the case of exchange transactions in particular, the difficulties… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Article 14(1) of that directive provides: ‘“Supply of goods” shall mean the transfer of the right to dispose of tangible property as owner.’ - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 This request for a preliminary ruling relates to the interpretation of Articles 2(1) and 135(1) of Council Directive 2006/112/EC of 28 November… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Therefore the transactions at issue in the main proceedings do not fall within the scope of the exemptions laid down in Article 135(1)(f) of… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 As regards, in the first place, the exemptions laid down in Article 135(1)(d) of the VAT Directive, it should be recalled that, according to… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Article 2(1) of the VAT Directive provides that the supply of goods and services for consideration within the territory of a Member State by a… - **["JUDGMENT OF THE COURT (Fifth Chamber)", "Skatteverket v David Hedqvist", "22 October 2015"]**: 22 October 2015 Under Chapter 1 of the Law (1994:200) on VAT, (mervärdesskattelagen (1994:200), ‘the Law on VAT’), Paragraph 1 provides that VAT is to be paid… --- Consilena is a software provider, not a law firm. 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