By skyforbes 
New VAT amendments redefine tax obligations for businesses in the digital asset sector.
The country has taken a major overhaul of the tax rules concerning crypto currencies in the finance and business sectors. The Federal Tax Authority released a statement on October 2 stating new rules would come into effect on November 15, 2024, in a proposal to clarify major points regarding the taxation of virtual assets.
Probably one of the most changes well in the spirit of this law is the retroactive VAT exemption regarding certain activities pertaining to virtual assets, namely the transfer of ownership and conversion of cryptocurrencies. Article 42 of the amendments defines virtual assets as “A digital representation of value that can be digitally traded or converted and used for investment purposes,” and therefore clearly excluded are digital representations of fiat currencies or financial securities.
These exemptions are effective from January 1, 2018, so businesses would also need to reassess their VAT filings from that date as well. Companies that are engaged in crypto transactions may need to make voluntary disclosures for amendment of earlier returns; that may completely change tax liabilities and input tax recovery positions of such companies.
These regulatory updates mark an evolving and growingly significant place for the UAE as a leader in the digital economy; there must be a great care from businesses operating within the sector.