Have you ever been stumped by a child’s question, because the answer’s so obvious you can’t quite put it into words? For example: “Why can’t I spend my Monopoly money in Tesco?”
Thanks to a recent legal opinion released by the European Court of Justice, we now have a surprisingly official way to answer that question.
Advocate General Kokott (in Case ECJ C-472/24 (Žaidimų valiuta)) was asked to consider whether in-game currency – like the coins, gems or tokens you buy in online video games – counts as legal tender. Her logic could be applied to board game currency too.
How in-game currency works
In many modern video games, players can buy upgrades to improve their experience: new skills, better weapons, or even trendy outfits (known as skins).
Instead of paying for them directly in pounds or euros, you would usually buy bundles of in-game currency to spend on upgrades.
The bundles rarely match the cost of upgrades exactly. This means that players often end up with leftovers and are nudged to buy more.
The VAT aspect
A Lithuanian businessperson bought in-game currency with real money, then resold it for real money (at a profit). The Lithuanian tax authority (State Tax Inspectorate) said that VAT was due on those sales.
The reseller argued that the sales should be VAT-exempt under the EU’s Principal VAT Directive, which exempts transactions involving legal tender. They pointed to the earlier decision by the Court of Justice of the European Union that Bitcoin transactions are VAT-exempt, even though Bitcoin isn’t legal tender, because it’s accepted as a ‘means of payment’.
The Advocate General’s answer
AG Kokott wasn’t convinced. She said that the in-game currency isn’t a ‘means of payment between operators in legal transactions’. In other words, you can’t use it in the real world, so it doesn’t qualify for the VAT exemption. She also said that it doesn’t count as a ‘voucher’ under the Directive.
In summary: you can’t spend Monopoly money – or Fortnite V-Bucks, or FIFA points – at Tesco. Because they’re not real money.
Would you like to know more?
For specialist guidance on VAT compliance for your business, including international aspects, get in touch with Luigi Lungarella or send us an enquiry.
