Cryptocurrency transactions in the United Arab Emirates (UAE) are set to receive a significant boost next month as they will be exempt from value-added tax (VAT). This new development was announced by accounting giant PricewaterhouseCoopers (PwC), who revealed that the UAE’s Federal Tax Authority (FTA) recently made amendments exempting crypto transfers from VAT charges.
According to PwC, the exemption of crypto transactions from VAT will come into effect starting January 1st, 2018. This move is expected to further promote the growth of the cryptocurrency industry in the UAE and attract more investors and businesses to the region.
The announcement of the VAT exemption for crypto transactions comes on the heels of a recent agreement between the UAE’s Securities and Commodities Authority (SCA) and Dubai’s Virtual Assets Regulatory Authority (VARA). The agreement aims to enhance the country’s global position in the cryptocurrency industry by setting rules and procedures for licensing and supervising virtual asset service providers (VASPs) and related activities.
Under the agreement, VASPs operating in or from Dubai are required to obtain a license from VARA and can be registered with the SCA to cater to the wider UAE. VASPs looking to operate in other Emirates must obtain a license from the SCA. The agreement also covers mutual supervision of VASPs, penalty imposition, exchange of information, and cooperation in employee training.
This recent development underscores the UAE’s commitment to fostering a favorable regulatory environment for the cryptocurrency industry. With VAT exemption for crypto transactions and clear guidelines for VASPs, the UAE is positioning itself as a leader in the global cryptocurrency market.
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