Dubai, Thursday, October 10, 2024- The United Arab Emirates (UAE) is set to exempt cryptocurrency transactions from value-added tax (VAT), a significant step in boosting the country’s crypto market appeal.
Starting next month, crypto transfers, including ownership transfers and conversions of virtual assets, will no longer incur VAT, according to PricewaterhouseCoopers (PwC).
This exemption, made official through amendments published by the UAE’s Federal Tax Authority (FTA), is retroactive to January 1, 2018. It covers services such as the management of investment funds and any transaction involving virtual assets, including cryptocurrencies.
This regulatory change follows a recent agreement between the UAE’s Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA). The agreement seeks to streamline licensing and supervision of virtual asset service providers (VASPs) across the UAE, boosting the country’s position as a leading global crypto hub. VASPs operating in Dubai require a license from VARA, while those in other Emirates need to be licensed by the SCA.
The UAE has made significant moves in recent months to strengthen its cryptocurrency regulatory framework, positioning itself as a forward-thinking market for virtual assets. The cooperation between SCA and VARA, alongside the tax exemption, reflects the country’s efforts to attract global crypto businesses and encourage blockchain innovation.
