coinspress.com
Starting November 15, 2024, the United Arab Emirates will remove Value Added Tax (VAT) from cryptocurrency transactions for both individuals and businesses, marking a significant shift in its regulatory approach.
Unlike many countries that are still formulating clear guidelines, the UAE has proactively embraced the crypto sector.
Previously, the UAE imposed a 5% VAT on crypto transactions, which complicated participation due to the nature of digital currencies.
The recent policy change aims to promote investment and growth in the cryptocurrency space. The Federal Tax Authority (FTA) announced that transactions involving cryptocurrencies, including conversions, will no longer be subject to VAT.
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Dubai is positioning itself as a key player in the global cryptocurrency market, attracting various companies with its favorable regulatory environment.
The UAE has previously exempted certain financial activities from VAT since 2018, allowing businesses that paid VAT on past crypto transactions to potentially seek refunds. However, this may require reviewing transaction records, which could lead to penalties for any identified fraud.
From July 2023 to June 2024, the UAE received over $30 billion in crypto inflows, establishing itself as a major economy in the Middle East and North Africa region. The value of decentralized finance (DeFi) services in the UAE surged by 74%, further solidifying its growing crypto ecosystem.
With this tax exemption initiative, the UAE is set to attract more venture capital and blockchain enterprises in the near future.