The United Arab Emirates (UAE) has announced regulations that will exempt the transfer and conversion of digital assets and cryptocurrencies from Value Added Tax (VAT).

The changes, announced by the Federal Tax Authority (FTA) on October 2, will also apply to additional services such as the management of investment funds and the transfer of virtual assets.

These exemptions will be applied retroactively from January 1, 2018.

Virtual assets are defined as representations of value that can be traded or converted digitally in the UAE and used for investment purposes, PwC said.

Dubai’s Virtual Asset Regulatory Authority (VARA) and the Securities and Commodities Authority (SCA) have agreed to jointly regulate virtual asset service providers.

VARA has tightened crypto marketing rules, requiring all promotional materials to include a warning that “virtual assets may lose value in whole or in part and are subject to extreme fluctuations.”