The post UAE crypto VAT exemption viewed as significant positive impact on virtual asset ecosystem appeared on BitcoinEthereumNews.com.

On October 2nd the UAE Federal Tax Authority exempted crypto transaction from value-added tax (VAT). Effective from Nov. 15, 2024, the exemption applies retrospectively to transactions dating back to Jan. 1, 2018. The decision was seen as positive by many within and outside the sector, especially for VASP activities within the UAE. The amendment clarified that the 5% VAT does not apply to digital assets, covering exchanges and ownership transfers, similar to what is applied to other traditional financial services. Kokila Alagh Founder of KARM Legal on LinkedIn noted, “This will mean reduced tax burdens for VASPs, as they will no longer be required to pay VAT on the exempted transactions which were previously subject to a 5% VAT.” She also noted that with its focus on taxation, this regulatory development will have a significant impact across key aspects including operating, holding, and transacting with virtual assets. Baker Mckenzie for example viewed this as a significant development in becoming a global blockchain hub. They noted, “By removing tax burdens on crypto-related activities and establishing clear regulations, the country is creating a competitive advantage in the global crypto market.” Accordingly these efforts, combined with strong regulatory measures and additional incentives for fund managers, ensure that the UAE remains a leader in the evolving global crypto landscape, attracting firms and investors alike to its dynamic and forward-thinking market.” Baker Mckenzie also noted that with the advent of the metaverse and increase in e-commerce, the concept of virtual assets has become increasingly significant. Speaking to Cryptopolitan, Stephanie Emile, General Manager of Binance FZE in UAE believes that the news was a significant step forward for the virtual asset space. She explained, “By treating virtual assets in the same manner as traditional financial transactions, the federal decree affirms the government’s progressive stance and vision…

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Filed under: News - @ October 22, 2024 4:22 pm