International Tax Review is part of the Delinian Group, Delinian Limited, 8 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2023

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement
Local Insights

Accounting for crypto assets in Luxembourg: a guide

Sponsored by


Vincent Martin and Jordan Feltesse of Deloitte Luxembourg overview the evolving tax landscape for crypto assets in Luxembourg, offering guidance in the absence of established regulation.

The recent turbulence in the US banking system has presented yet another opportunity for the crypto market. Despite this challenging environment, the financial industry has seen a growing interest in this asset class. Major banks are forming specialised groups dedicated to blockchain technology and cryptocurrency, while institutional investors—particularly those focused on alternative funds—find the efficiency of fund tokenisation attractive.

In the EU and in Luxembourg in particular, there have been new developments in the crypto asset world. The Commission de Surveillance du Secteur Financier updated its FAQ Virtual Assets–Undertakings for collective investment on April 6 2023. Essentially, the FAQ states that Luxembourg alternative investment fund managers investing in virtual assets through one or several target funds are not required to apply for an “Other-Other Fund-Virtual assets” licence. At the EU level, there should be progress following the EU Central Bank’s decision to launch the implementation phase of its central bank digital currency project in Q3 2023.

Crypto assets are increasingly prevalent and the trend is likely to persist. However, this new asset class raises an important question: how should crypto assets be accounted for under the Luxembourg GAAP?

Currently, there is no specific Luxembourg guidance or regulation for the accounting treatment of crypto assets. It is thus difficult to anticipate what might be an acceptable accounting treatment under Luxembourg GAAP.

However, we can draw examples from France and international standards such as the IFRS. In 2019, the Autorité des normes comptables (ANC) in France issued guidance (under French GAAP) on the accounting treatment of cryptocurrencies, while the IFRS committee also provided guidance on the topic.

Below are examples of different classifications that might apply to crypto assets.

Intangible asset

Most crypto assets could fit into the definition of intangible assets found in IAS 38. This approach was validated by the IFRS committee with respect to cryptocurrency on the grounds that:

  • (i) It is capable of being separated from the holder and sold or transferred individually; and

  • (ii) It does not give the holder the right to receive a fixed or determinable number of units of currency.

This could, in principle, apply to all crypto assets held for long-term investment purposes, and specifically to those for which IAS 2 does not apply (see inventory below). Moreover, under French GAAP, the ANC validated this approach (although not for all crypto assets) with the possibility of amortising and/or depreciating the assets.


If an entity (broker-dealer) intends to sell crypto assets in the regular course of business, or for resale in the near future, they can apply IAS 2 to treat the crypto assets as inventory. This approach was validated by the IFRS committee as well.

Cash or cash equivalent

Crypto assets like bitcoin and stable coins are increasingly used as a medium for the exchange of goods and services. El Salvador became the first country to make bitcoin legal tender in September 2021, offering financial incentives to those who use cryptocurrency for payment. Major companies are following suit, with brands like Balenciaga and Gucci, under the Kering group, accepting crypto payments. The partnership between Shopify and allows merchants to accept payments in up to 20 different coins. More restaurants also are accepting such payments, including popular chains like Subway, Starbucks, and Taco Bell.

However, even if some cryptocurrencies can be used as a means for exchanging goods or services, the IFRS commmittee concluded that cryptocurrencies are not cash (or a cash equivalent). This was because they do not have the characteristics of cash as described in paragraph AG3 of IAS 32.

Closing thoughts

As the prominence of crypto assets grows, the industry would benefit from guidance on the accounting treatment of such assets. Players in this space will need to exercise professional judgment and expertise, not just for accounting but also for tax and legal purposes. This is fundamental for those wishing to capitalise on the potential opportunities and navigate current and future challenges in this evolving landscape.

more across site & bottom lb ros

More from across our site

The forum heard that VAT professionals are struggling under new pressures to validate transactions and catch fraud, responsibilities that they say should lie with governments.
The working paper suggested a new framework for boosting effective carbon rates and reducing the inconsistency of climate policy.
UAE firm Virtuzone launches ‘TaxGPT’, claiming it is the first AI-powered tax tool, while the Australian police faces claims of a conflict of interest over its PwC audit contract.
The US technology company is defending its past Irish tax arrangements at the CJEU in a final showdown that could have major political repercussions.
ITR’s Indirect Tax Forum heard that Italy’s VAT investigation into Meta has the potential to set new and expensive tax principles that would likely be adopted around the world
Police are now investigating the leak of confidential tax information by a former PwC partner at the request of the Australian government.
A VAT policy officer at the European Commission told the forum that the initial deadline set for EU convergence of domestic digital VAT reporting is likely to be extended.
The UK government shows little sign of cutting corporate tax, while a growing number of businesses report a decline in investment as a result of the higher tax burden.
Mariana Morais Teixeira of Morais Leitão overviews Portugal’s new tax incentive regime designed to boost the country’s capital-depleted private sector.
Septian Fachrizal, TP analyst at the Directorate General of Taxes, outlines how Indonesia is relying heavily on the successful implementation of pillar one.