VAT exemption on cryptocurrency transactions in the United Arab Emirates: companies urged to review past tax declarations.
On October 2, the government of the United Arab Emirates (UAE) announced significant changes to the tax regulations, which will include a Value Added Tax (VAT) exemption related to cryptocurrency and other digital asset transactions starting November 15, 2024.
Specifically, Article 42 of the Executive Regulation concerning financial services has been updated to exclude certain transactions with digital assets from VAT. These include fund management and cryptocurrency transfer and conversion transactions.
Since January 2018, these types of transactions have been subject to a retroactive VAT exemption, allowing businesses to review and amend any previous tax declarations.
Ankita Dhawan, a senior associate at the consulting firm Métis Institute, stated:
“The UAE has essentially classified virtual assets in the same bucket as traditional financial services – several of which are already exempt from VAT. This legitimizes VAs.”
With the implementation of the new regulations, the federal tax authority of the United Arab Emirates urges companies to review their tax aspects.
