  The UAE has exempted all crypto transactions from value-added tax (VAT).

  This move further legitimizes the cryptocurrency sector in the country.

  The decision is expected to attract more investors and businesses to the UAE’s digital asset space

UAE Grants Crypto Transactions Tax-Free Status

In a major boost for the cryptocurrency industry, the United Arab Emirates (UAE) has announced that all crypto transactions will be exempt from value-added tax (VAT) starting November 15, 2024. This retroactive exemption, effective from January 1, 2018, aligns cryptocurrencies with traditional financial services that are already VAT-free.

The UAE’s Federal Tax Authority has clarified that the exemption applies to the exchange and transfer of digital assets, effectively eliminating the 5% VAT on all cryptocurrency transactions.

This move signifies a significant step towards legitimizing cryptocurrencies in the UAE, as noted by Ankita Dhawan, a senior associate at the Métis Institute. By placing crypto assets on par with traditional financial services, the UAE is positioning itself as a favorable jurisdiction for the digital asset industry.