Place of supply for blockchain protocol block‑reward services

Determine the place of supply for the service provided by Bitcoin miners and mining pools to the Bitcoin protocol when they receive fixed block rewards via the Coinbase transaction so that VAT/GST treatment can be established for these cross‑border services.

Background

Indirect tax treatment of mining services hinges on identifying the place of supply. While transaction‑fee services to identifiable users may follow destination‑based rules, the paper highlights a more complex case: services provided to the blockchain protocol itself in exchange for block rewards.

Because the blockchain protocol lacks a traditional jurisdictional nexus, the paper notes that the place of supply for such services cannot be determined, despite the large economic value involved. Establishing a principled place‑of‑supply rule is necessary to support VAT/GST administration and international coordination.