The UAE Federal Tax Authority (FTA) announced significant amendments to the VAT laws on October 2, promoting growth in the cryptocurrency sector. Notably, the revisions include VAT exemptions for the transfer and conversion of virtual assets, effective retroactively from January 1, 2018. PwC, a leading consultancy firm, highlighted that these changes not only aid in managing investment funds but also in conducting transactions involving digital assets, defining them as tradeable representations of value used primarily for investment purposes.

Furthermore, PwC advised companies in the virtual asset space to reassess their VAT positions retrospectively, with a focus on optimizing input tax recovery. This development follows the collaborative effort of Dubai’s Virtual Asset Regulatory Authority (VARA) and the UAE’s Securities And Commodities Authority (SCA) to enhance oversight and licensing frameworks for virtual asset service providers (VASPs), underscoring the nation’s commitment to becoming a global hub for digital asset innovation and security.

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