- The UAE FTA issued a directive requiring digital currency and crypto payments to be converted into AED for VAT reporting.
- Businesses must use the average rate from three FTA-approved centralized exchanges, keeping the same three exchanges for the whole year.
- The AED value must be based on the exact transaction date and time.
- This changes valuation only: virtual asset transfers/conversions stay VAT-exempt, while taxable goods/services paid in crypto remain subject to 5% VAT.
- Businesses must keep timestamped rate evidence from the three exchanges and cannot use Central Bank rates or post-transaction cash-out values.
Source: khaleejtimes.com
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.
Latest Posts in "United Arab Emirates"
- FTA Issues VAT Guidance on Deemed Supply Service Valuation
- FTA Guidance on VAT Treatment of Digital Currency Conversions into AED
- FTA Guidance on VAT Treatment of Life Insurance Fees and Charges
- FTA Directive Clarifies VAT Treatment of Judicial Expert Services
- UAE VAT Apportionment Rules Change for Tax Years After October 1, 2027
