UAE has joined the global tax reporting system for cryptocurrencies

Key points:

• The UAE Ministry of Finance has signed the Multilateral Competent Authority Agreement under CARF.
• The new reporting rules will come into force in 2027, with the first data exchange expected in 2028.
• Public consultations on the rules have been ongoing since September 15.

The United Arab Emirates has joined the global cryptocurrency tax reporting system.

In 2023, the country signed the Multilateral Competent Authority Agreement on the Automatic Exchange of Information under the Crypto-Asset Reporting Framework (CARF) developed by the Organization for Economic Cooperation and Development (OECD). The agreement establishes mechanisms for the automatic exchange of tax information on activities related to crypto assets between countries.

Cryptocurrency companies will need to comply with the new reporting rules by 2027, and in 2028, the UAE will begin exchanging data with international tax authorities. The Ministry noted:

“The framework establishes a mechanism for the automatic exchange of tax-related information on crypto-asset activities, ensuring that the UAE provides certainty and clarity to the crypto-asset sector.”

Gathering opinions will have a positive impact on the market

On September 15, the authorities launched an eight-week public consultation, which will last until November 8.

The statement says that the consultation “aims to develop clear and effective regulatory rules informed by the insights of experts and stakeholders.” Consulting service providers, traders, custodians, exchange platforms, and other market participants are invited to participate in the process.

Nitesh Mishra, the co-founder and CTO of hedge platform ChaiDEX, said the agreement “brings greater legal clarity and certainty to crypto activities in the UAE, making the environment safer for compliant investors.” He added:

Allowing “public input on the rules” means “the final regulations are likely to reflect market and investor needs.”

Last fall, UAE authorities abolished VAT on cryptocurrency transfers and exchanges and allowed registered crypto firms to reclaim previously paid taxes. At the same time, Dubai tightened the rules for promoting crypto services, requiring companies to accompany their investment products with a risk disclosure statement.