Clarifications Regarding Virtual Assets And The Value Added Tax

" Following the Cabinet Decision No. 100 of 2024 on the Federal Decree-Law No. 8 of 2017 on Value Added Tax that introduced the definition of Virtual Assets as a:

"Digital representation of value that can be digitally traded or converted and can be used for investment purposes, and does not include digital representations of fiat currencies or financial securities", we would like to clarify that:"

• Operations involving Virtual Assets are not automatically exempt from Value Added Tax ("VAT").
• Whether a sale or purchase qualifies for exemption depends on the nature of the transaction, regardless of whether it is conducted using fiat currencies or virtual assets.
• Article 42 of the Federal Decree-Law presents a non-exhaustive list of financial services, which encompasses activities related to money transactions (or equivalents) and the provision of credit.