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On October 2, the UAE Federal Tax Authority (FTA) announced key amendments to its VAT framework, following Cabinet Decision No. (100) of 2024.
These changes, which come into effect on November 15, provide clarity on the tax treatment of virtual assets, tokens, and blockchain-based transactions.
“The US needs to follow if they want to be competitive." crypto analyst Borovik wrote in an October 6 social media post on X.
For the first time, the amendments formally address the VAT treatment of virtual assets, such as cryptocurrencies and digital tokens, by exempting certain transactions from the existing 5% levy. This includes the management of investment funds and the transfer and conversion of virtual assets, with the exemption retroactively effective from January 1, 2018.
These amendments signal the UAE’s effort to remain a global leader in fostering innovation within the digital asset industry while safeguarding the interests of both businesses and consumers.
A key highlight of the FTA’s amendment is the formal definition of "Virtual Assets." According to the new law, virtual assets are now recognized as digital representations of value that can be traded, transferred, or used for investment purposes.
A Financial Times report indicates that valuation in the private assets market continues to pose significant challenges due to the inherent complexities of these investments. Factors such as the opaque nature of some assets, less frequent pricing, and reliance on subjective estimates can complicate accurate valuation.
The Chartered Alternative Investment Analyst Association (CAIA) is actively advocating for enhanced valuation methodologies in the alternative investments sector.
The Federal Tax Authority (FTA) is the government entity responsible for administering, collecting, and enforcing federal taxes in the United Arab Emirates.
Brian Armstrong, CEO of Coinbase, said that broader cryptocurrency use will emerge from seamless products where users benefit without engaging with the underlying systems.
Michael Saylor, co-founder of Strategy Inc., announced that the company has expanded its bitcoin holdings and reported a 25.9% year-to-date yield for 2025.
Lark Davis, founder of Wealth Mastery, advised traders to avoid leverage and risky "revenge trading" amid widespread liquidations and emphasized the importance of protecting capital.
Kent Lin, Co-founder of Optimum, said that Bitcoin's market capitalization is approximately 7% of gold's, suggesting that the rally in gold expands potential upside for Bitcoin.
Anna Milne, founding director of research for the CAFE Association, said that membership focuses on industry leadership that combines innovation with consumer protection, rather than merely adhering to baseline compliance.
Edward "Coach" Weinhaus, the Founding Executive Director of the CAFE Association, emphasized that fraud is a shared problem and detailed the organization's plan to educate consumers and support responsible companies.
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