The VAT Consequences of Crowdfunding

Abstract

Because crowdfunding is a relatively new phenomenon there is little experience with the VAT consequences of crowdfunding. In February 2015, the European Commission shared its thoughts on the issue in a report to the VAT committee. The VAT committee subsequently adopted guidelines on the VAT treatment of crowdfunding. This report and these guidelines are a reason for the author to have a closer look at the VAT consequences of the concept of crowdfunding. When doing this, the author distinguishes between four types of crowdfunding: donation based crowdfunding (section 2), reward based crowdfunding (section 3), credit based crowdfunding (section 4) and equity based crowdfunding (section 5), but also between the positions of the platforms, the persons contributing (“investors”) and the persons receiving the funding (“investees”). In the next sections, the author discusses the VAT committee guidelines in each section separately. For donation based crowdfunding there is no VAT committee guideline. Therefore, in Section 2, the author only discusses the opinion of the European Commission.