The United Arab Emirates (UAE) has made official the decision to exempt crypto transactions from value-added tax (VAT). This VAT exemption applies to the exchange and transfer of virtual assets.
Notably, the new rule is retroactive, meaning it covers crypto transactions from as far back as January 1, 2018. The official update was released in Arabic on October 2, 2024, followed by an English translation on October 4, 2024.
This means that transfers and conversions of cryptocurrencies such as Bitcoin, Ethereum, and other digital tokens will no longer be subject to the country’s standard 5% VAT levy.
The Federal Tax Authority (FTA) published amendments that bring digital assets under the same regulatory treatment as traditional financial services, which have long been exempt from VAT.
Companies that previously paid VAT on crypto-related transactions may now be eligible to reclaim those taxes, opening the door for potential refunds.
The retroactive nature of this regulation, dating back to January 1, 2018, could have significant financial implications for businesses.
