UAE signs agreement on automated exchange of crypto tax information
TL;DR Breakdown
- UAE has signed MCAA under OECD’s Crypto-Asset Reporting Framework
- Implementation is set to begin in 2027, with the first exchange of information expected in 2028
- The Ministry of Finance has invited all stakeholders for consultation
The United Arab Emirates has signed the Multilateral Competent Authority Agreement (MCAA) on the Automatic Exchange of Information under the Crypto-Asset Reporting Framework (CARF). The Ministry of Finance had announced its intention to implement the framework in November last year.
UAE commits to global crypto tax reporting
The Ministry of Finance has signed the MCAA under the Organization for Economic Cooperation and Development to implement an automatic tax reporting system that exchanges cryptocurrency-related tax information with other signatories. The framework was developed in 2023 and establishes the mechanisms for the automated exchange of tax-related information regarding cryptocurrencies.
The Ministry stated that the framework would provide clarity and certainty to the crypto sector in the region, while also increasing global tax transparency, that is especially important for the crypto sector.
The Ministry has initiated an eight-week public consultation inviting all stakeholders to share their views, opinions, and advice regarding the CARF implementation. This includes all exchanges, custodians, intermediaries, service providers, and others active in the region.
The consultation aims to develop clear regulatory rules that do not hinder but rather encourage the growth of the crypto ecosystem in the United Arab Emirates.
UAE’s flourishing crypto ecosystem
The development follows the UAE’s decision to make crypto activity tax-free. Across all seven emirates, individuals pay no tax on key crypto activities such as mining, trading, staking or selling. This includes no income and no capital growth tax on cryptocurrencies. Furthermore, last year, the United Arab Emirates amended its Value Added Tax (VAT) regulations to make cryptocurrencies exempt.
This, coupled with strong regulatory clarity in the United Arab Emirates crypto market, thanks to the UAE’s Ministry of Finance and local regulators like Dubai’s Virtual Asset Regulatory Authority and Financial Services Regulatory Authority, attracts crypto stakeholders from across the globe. The recent developments only add to the UAE’s charm of being one of the most crypto-friendly places on earth.
