Are exchange commissions/rebate on trades VAT exempt in EU?

Any idea whether exchange rebates are VAT exempt in EU? Imagine a prop trading company, which trade on an exchange like bybit or binance and earn exchange rebates from certain trades (usually maker trades). Would such company have to report and pay VAT from those rebates? Or are rebates/commissions VAT exempt?

Buying or selling crypto itself is VAT exempt in EU.


I believe you are asking whether providing market making services on crypto exchanges and receiving fees or rebates for such services are subject to VAT in the EU. I am not a commodity tax expert but it seems to me that the supply of market making services in relation to crypto trading would be a financial service exempt from VAT on the same basis that fees or rebates received for securities or commodity exchange market making are VAT exempt financial services.

A larger concern for me would be whether the rebates received for maket making are exempt from income tax. Have you considered this?

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Thank you, Mark. Yes my question was exactly about providing market making services on crypto exchanges and earning exchange rebates.

Would you be able point out where it is said that specifically “fees or rebates received for securities or commodity exchange market making are VAT exempt financial services”.

The VAT directive Article 135(f)

says that indeed exchanging currencies, stocks, cryptos are VAT exempt itself (no VAT paid when crypto is bought or sold) but does it apply to rebates paid by exchanges? I guess it does count as a financial service but I find the phrasing somewhat vague.
Or maybe it’s just me not being used to such language and for a lawyer it is obvious :slight_smile:

Regarding income tax, here they are not exempt (maybe this depends on a country). But my question was only about VAT.


As far as I am aware, HMRC VAT Notice 701/49 finance (updated 2019) is the only guidance that HMRC has issued publicly on the VAT treatment of securities trading fees and unfortunately it does not deal specifically with exchange market making fees and rebates.

I know from my Canadian securities law practice that TSX trading fees, including market making fees, are exempt from GST (Canada’s VAT equivalent). This is expressly stated in the TSX Trading Fee Schedule.

I also see that the Irish Revenue authority has issued guidance stating that stock exchange trading and listing fees are generally exempt from VAT but this seems to be broader than UK VAT rules at least insofar as company listing fees are concerned.

Sorry I can’t give you a more specific source for HMRC guidance on the treament of securities market making fees and rebates.

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