Key Takeaways:
- The UAE exempts cryptocurrency transfers and conversions from VAT, retroactive to January 1, 2018.
- Businesses handling virtual assets in the UAE should reassess tax filings and input VAT recovery options.
- Dubai’s VARA and the UAE’s SCA have aligned to oversee virtual asset service providers, enhancing regulatory clarity.
The UAE has exempted cryptocurrency transfers and conversions from value-added tax (VAT), reinforcing its status as a crypto-friendly hub.
Announced by the UAE’s Federal Tax Authority (FTA) on October 2, the VAT exemptions apply retroactively from January 1, 2018.
JUST IN: 🇦🇪 UAE eliminates Value Added Tax on #Bitcoin and crypto transfers. pic.twitter.com/kvrs81YwEY
— Bitcoin Magazine (@BitcoinMagazine) October 6, 2024
These exemptions also cover services like managing investment funds, offering financial relief to firms in the virtual asset space.
PwC noted that businesses dealing with virtual assets—defined as digital representations of value—should reassess their input tax recovery, a process allowing companies to reclaim VAT on business-related purchases.
Some firms may need to submit voluntary disclosures to correct historical VAT filings.
JUST IN: 🇦🇪 UAE eliminates taxes on all crypto transactions.
— Watcher.Guru (@WatcherGuru) October 6, 2024
Additionally, the UAE is refining its crypto regulations. Dubai’s Virtual Asset Regulatory Authority (VARA) and the UAE’s Securities and Commodities Authority (SCA) now jointly oversee virtual asset service providers (VASPs), enabling VARA-licensed firms to operate nationwide.
VARA also recently mandated that digital asset promotions include disclaimers about potential loss and volatility.
About The Author
Efe Bravo, a seasoned journalist, delivers compelling insights into the cryptocurrency and blockchain industry.
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