VATP039: UAE VAT Public Clarification on Cryptocurrency Mining – January 13, 2025

• The UAE Federal Tax Authority issued VAT Public Clarification VATP039 on 13 January 2025
• The clarification addresses the treatment of cryptocurrency mining
• With the increasing popularity of cryptocurrencies, the tax treatment of mining has become important
• Proof of work allows a person to mine crypto currency for their own account or for someone else’s account
• Cryptocurrencies like Bitcoin and Ethereum are considered virtual assets for this clarification
• The Public Clarification explains the VAT treatment of crypto currency mining using proof-of-work
• Mining crypto currency for personal use is not taxable and falls outside the scope of VAT
• Mining on behalf of another person is considered a taxable supply of services
• Input tax incurred by a registrant for mining on behalf of another person may be recoverable
• Mining of crypto currency involves specialised computers validating blockchain transactions for a reward

Source: tax.gov.ae

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---