- The UAE has implemented amendments to its Value-Added Tax (VAT) regulations.
- The new amendments will exempt the transactions and conversions of crypto assets from VAT.
- The FTA has urged crypto businesses in the country to review their retrospective VAT position.
The United Arab Emirates (UAE) made crypto transactions and conversions VAT-free with amendments to its Value-Added Tax (VAT) regulations. This change, effective January 1, 2018, solidifies the UAE’s position as a leading crypto hub.
The UAE’s Federal Tax Authority (FTA) issued the VAT amendments on October 2, 2024. Tax consultancy firm PwC noted that the UAE defines cryptocurrencies as “representations of value that can be digitally traded or converted.” The auditing firm added that this category excludes financial securities and fiat currencies.
Bitcoin enthusiast Kyle Chasse called the development “bullish.” He said the UAE’s move to eliminate VAT for crypto transfers is “huge” for both individual and institutional investors.
The FTA encouraged crypto businesses in the country to review their retrospective VAT position under the new amendments and focus on input tax recovery. PwC indicated that virtual asset companies may need to submit voluntary disclosures to correct past VAT returns. UAE tax company Finanshels previously stated that registered businesses in the UAE can reclaim previously paid Value-Added Tax (VAT) through the Input Tax Recovery mechanism.
UAE Strengthens Crypto Regulations
UAE has led the way in implementing strong crypto regulations that support its goal of expanding its crypto hub. Coinbase CEO Brian Armstrong recognized the UAE as the first country to establish a specialized crypto regulator. The UAE’s progressive stance on crypto is also clear in the country’s work to publish a transparent rule book.
Read also: Ripple Expands in UAE with New Financial Services License
Additionally, the country’s FSRA updated its Anti-Money Laundering (AML) and Sanctions Rules and Guidance. The FSRA released the updated AML Rulebook in December 2023 to strengthen regulatory measures against money laundering, terrorism financing, and proliferation financing.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
