Impact on Businesses and Compliance Requirements

The newly introduced VAT amendments will have a significant impact on businesses operating in the digital asset sector in the UAE. Companies dealing with virtual assets, including cryptocurrencies, must now review their past transactions, particularly those from January 1, 2018, onwards. These businesses may need to file additional VAT returns or disclosures to ensure compliance with the retroactive exemptions. Failure to do so could lead to compliance issues or penalties.

Looking ahead, companies involved in virtual asset trading, management, or related activities will need to adjust their tax planning and compliance strategies. The amended regulations not only impact retroactive transactions but also set the tone for future operations. Businesses must ensure they understand the scope of VAT exemptions and how it affects their input tax recovery positions under the new law, requiring careful monitoring and potential consultation with tax professionals.

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