The UAE has introduced updates to its tax rules concerning cryptocurrencies. Starting October 2, the Federal Tax Authority announced VAT exemptions for digital asset transactions, including cryptocurrencies, retroactively effective from 2018.

Virtual Assets and VAT

Businesses dealing with virtual assets in the UAE can expect tax savings due to the new rules. The VAT exemption from January 1, 2018, can significantly reduce tax obligations. For companies that have been paying VAT since 2018, there is now a chance to review past filings and reclaim VAT through input VAT recovery.

New Rules for Exports and Services

The changes also affect exporters in the UAE. It is now easier to apply the zero VAT rate for exporting goods due to relaxed documentary requirements. However, exporting services, especially those linked to real estate or digital activities, may now be subject to the standard VAT rate.

Tax Breaks for Investment Funds

Investment funds are also benefiting from tax breaks. Fund managers and licensed investment funds can take advantage of VAT exemptions, potentially lowering their operating costs and aiding growth, especially when dealing with services from abroad.

These changes in tax policy offer new opportunities for businesses operating in the UAE. The updates will help crypto and investment firms save money and better adapt to the rapidly evolving digital asset market.