In a move to align the crypto industry with traditional financial services, the United Arab Emirates has introduced an exemption for cryptocurrency transactions from value-added tax. This update, effective as of November 15, applies to transactions dating back to January 1, 2018. The official update was first made available in Arabic on October 2, 2024, and later in English on October 4, 2024.
For the first time, it is explicitly stated that digital assets are not subject to tax, covering both the exchange and transfer of ownership of these assets. As a result, all cryptocurrency transactions, including transfers and conversions, will be exempt from the 5% tax. According to Ankita Dhawan, a senior associate at the Métis Institute, a think tank for dispute resolution, 'The UAE has effectively categorized virtual assets alongside traditional financial services, many of which are already exempt from VAT, thereby legitimizing them.'