The VAT Treatment of “Reward Crowdfunding”

Abstract

Crowdfunding is a fast-growing phenomenon of the new digital economy. Many different fundraising models exist, including donation, reward, pre-sale, loan and equity crowdfunding. In this article, the author argues that a distinction ought to be made between reward crowdfunding and pre-sale crowdfunding. The author further discusses the VAT treatment applicable to reward crowdfunding, depending on the type of reward that is granted by the fundraiser to the backer.