UAE exempts crypto transfers, conversions from value-added tax
The UAE, particularly its financial hubs in Dubai and Abu Dhabi, is launching new efforts and legal frameworks to attract cryptocurrency startups and investors. Consider this newest update: The UAE has approved value-added tax exemptions for cryptocurrency trades and conversions. The UAE’s published adjustments will take effect on November 15.
On October 2, the Federal Tax Authority announced Cabinet Decision No. (100) of 2024 to alter executive regulations pertaining to the Federal Tax Authority (FTA).
The amended executive regulation has over 30 revisions affecting a variety of businesses. According to PwC, the nation’s Federal Tax Authority will apply these exemptions to the management of investment funds and other crypto-related operations.
Furthermore, PwC states that the exemptions for virtual asset transfers and conversions are effective as of January 1, 2018. Furthermore, the modifications concern input tax recovery for cryptocurrency businesses. According to PwC, cryptocurrency in the UAE is a “representation of value that can be digitally traded or converted and used for investment purposes.”
UAE wants to be crypto-friendly
While other countries, notably China and India, have taken a step back from cryptocurrency adoption, the UAE is embracing it. The country has been aggressively working to foster a positive atmosphere for blockchain and cryptocurrency firms. Dubai’s Virtual Assets Regulatory Authority also plays an important role in regulating virtual assets in the UAE. VAT concessions for cryptocurrency transfers and conversions may entice more crypto firms to the UAE.
The market’s expansion reflects the country’s optimistic stance on cryptocurrency. A recent Chainalysis research revealed that the UAE acquired more than $30 billion in cryptocurrency between July 2023 and June 2024.
This figure has propelled the country to the third-largest crypto economy in the Middle East. Chainalysis also cited an increase in the number of venture capital funds and blockchain startups in the UAE as a factor driving the country’s growth.
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