UAE Abolishes VAT on Cryptocurrency Transactions

The UAE authorities have exempted all cryptocurrency transactions from the 5% value-added tax. This was highlighted by PwC.

“The UAE has effectively placed digital assets on par with TradFi. This legitimizes cryptocurrencies,” —commented Ankita Dhawan, a senior research fellow at the Métis Institute.

The exemption is retroactive from January 1, 2018. Companies involved with digital assets can apply for a refund of the VAT paid.

The new rules also provide VAT exemption for additional services, including investment fund management, transfer, and conversion of virtual assets.

According to Milkroad, the UAE, along with Singapore and Turkey, ranks among the top three in terms of digital asset adoption.

Earlier, on June 5, 2024, the country’s central bank board of directors approved amendments to the regulation on the supervision and licensing of stablecoins. According to the document, such assets must be backed by dirhams and cannot be pegged to other currencies.