The UAE, especially through its financial centers in Dubai and Abu Dhabi, continues to introduce initiatives and regulatory frameworks to attract cryptocurrency companies and investors.
Consider the latest update: The UAE has announced exemptions from Value Added Tax (VAT) for cryptocurrency transfers and transfers.
The changes published in the UAE will come into effect on November 15.
On October 2, the Federal Tax Authority published Cabinet Resolution No. (100) of 2024 updating the executive regulations related to value-added tax.
The updated executive regulations include more than 30 amendments affecting various industries.
The country’s Federal Tax Authority, according to details shared by the business consulting firm PricewaterhouseCoopersThese exemptions will apply to the management of investment funds and other activities related to cryptocurrencies.
Additionally, PwC reported that exemptions for the transfer and transfer of virtual assets are treated as effective as of January 1, 2018.
Furthermore, the amendments address input tax recovery for cryptocurrency companies. PwC explains that in the UAE, cryptocurrencies are defined as “a representation of value that can be traded or transferred digitally and can be used for investment purposes.”
The UAE wants to be crypto-friendly
While many countries, including China and India, have taken a step back when it comes to adopting cryptocurrencies, the UAE is embracing it.
The country is actively working to create a favorable environment for blockchain and cryptocurrency businesses. The Dubai Virtual Assets Regulatory Authority also plays a crucial role in regulating virtual assets in the UAE.
VAT exemptions for cryptocurrency transfers could attract more cryptocurrency companies to the UAE.
The country’s positive outlook on cryptocurrencies is also shown by its growth in the market. A recent report from Sequential analysis He noted that the UAE received more than $30 billion in cryptocurrencies between July 2023 and June 2024.
This number has brought the country to the top as the third largest cryptocurrency economy in the Middle East and North Africa region. Chainalogy also cited the rise in the number of venture capital funds and blockchain companies in the UAE as a factor contributing to the country’s growth.
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