According to TechFlow, on October 6, Cointelegraph reported that the UAE Federal Tax Authority (FTA) issued an amendment to the Value Added Tax (VAT) regulations on October 2, announcing the exemption of VAT on the transfer and exchange of digital assets such as cryptocurrencies. The move aims to make the UAE a more friendly jurisdiction for digital asset transactions. According to PwC's interpretation, the new regulations will provide VAT exemptions for additional services, including investment fund management and the transfer and exchange of virtual assets. These exemptions will be retroactive to January 1, 2018.

The UAE defines virtual assets as "representations of value that can be digitally traded or exchanged and used for investment purposes", but does not include legal tender or financial securities. PwC recommends that virtual asset-related companies analyze the impact of this exemption on their retroactive VAT status, with particular attention to their input tax deductions. In addition to VAT exemptions, UAE regulators have recently simplified and updated virtual asset rules. On September 9, the Dubai Virtual Asset Regulatory Authority (VARA) and the Securities and Commodities Authority (SCA), the UAE federal financial institution, reached an agreement to jointly regulate virtual asset service providers (VASPs). In addition, VARA has also strengthened control over cryptocurrency marketing, requiring related companies to prominently add disclaimers in promotional materials.