The United Arab Emirates (UAE) has taken a major step into the world of cryptocurrencies by exempting digital asset transactions and conversions from VAT. This means that any exchange or transfer of cryptocurrencies is no longer subject to VAT, making the country an even more attractive destination for crypto businesses. Furthermore, this measure has a retroactive impact from January 1, 2018, allowing businesses to recover previously paid VAT on eligible transactions.
Tax Benefits for Cryptographic Companies
This exemption not only facilitates current operations, but also offers great tax advantages for companies working with cryptocurrencies. Companies can now review their past VAT returns and recover what they paid in previous transactions. This change is a key incentive for registered companies to maximize their profits and reduce operating costs.
New Opportunities in Dubai
With the support of the Virtual Asset Regulatory Authority (VARA) and the Securities and Commodities Authority (SCA), the licensing process for cryptocurrency service providers (VASPs) has been simplified. Moreover, licensed companies can access the wider UAE market automatically, boosting the growth of the crypto sector in the region. The UAE is undoubtedly positioning itself as a global leader in the cryptocurrency sector.
