UAE Removes Taxes on Crypto Transactions
The UAE’s Federal Tax Authority (FTA) has issued amendments to Federal Decree-Law No. 8 of 2017, which governs Value Added Tax (VAT).
Effective November 15, 2024, following Cabinet Decision No. (100), the amendments introduce a VAT exemption for the transfer and conversion of virtual assets, including cryptocurrencies.
Both citizens and businesses dealing with crypto will now be exempt from paying VAT on such transactions.
Article 30 addresses the treatment of goods export under VAT, simplifying the requirements needed to apply a zero rate. Exporters can now provide one of several types of documents, such as customs declarations or transport certificates, reducing the previously stricter documentary requirements.
The changes also align with the provisions of the Excise Tax Law, especially concerning the exemption of excise goods exported from the country.
The most significant update is in Article 42, which covers the tax treatment of financial services. The amendment exempts additional services from VAT, particularly the management of investment funds, transfer of ownership, and conversion of virtual assets. These two latter services are now explicitly VAT-exempt, retroactive from January 1, 2018.
Businesses trading cryptocurrencies should now assess how this exemption affects their VAT obligations. Those who previously paid VAT on virtual asset transactions may need to submit voluntary declarations to adjust past tax returns.