The UAE has introduced amendments to the
Executive Regulations of Federal Decree-Law No. 8/2017 on VAT, exempting
certain activities related to cryptocurrencies and virtual assets from VAT.
This move aims to establish the UAE as a
hub for investment activities and support the growth of the financial sector.
The amendments, approved by the UAE
Cabinet through Cabinet Decision No. 100/2024, exempt digital representations
of value that can be digitally traded or converted and are intended for
investment purposes from VAT. However, this exemption does not extend to
digital representations of fiat currencies or financial securities.
The scope of the exemption covers
transfers, conversion, keeping, and managing virtual assets, essentially
encompassing cryptocurrency trading.
Additionally, the amendments provide
exemptions for investment fund management services, including the management of
fund operations, investments, and performance monitoring.