Crypto and blockchain companies in the UAE keep books in AED, measure crypto holdings and revenue at fair value, and apply one pivotal VAT fact: the transfer and conversion of virtual assets have been VAT-exempt — retroactively from 1 January 2018 — since Cabinet Decision No. 100 of 2024 amended the VAT Executive Regulation.
The VAT position that shapes your ledger
Under the amendment, the transfer of ownership of virtual assets and the conversion of virtual assets are exempt financial services, effective retrospectively from 1 January 2018 — and exempt means input VAT on directly attributable costs is generally not recoverable (FTA Public Clarification VATP040). Custody and management services became exempt from 15 November 2024, but services charged for an explicit fee or commission — trading fees, brokerage commissions — remain standard-rated at 5% where the place of supply is the UAE. A crypto business therefore runs a mixed book: exempt transfers and conversions alongside 5% taxable fee income, which forces partial-exemption input-tax apportionment every quarter.
Corporate Tax applies normally
A UAE crypto company is a taxable person under Federal Decree-Law No. 47 of 2022 like any other business: 9% on taxable income above AED 375,000. Revenue is recognised in AED, so every crypto-denominated receipt needs a dated AED value. Individual investors holding crypto personally are generally outside Corporate Tax scope, but a person trading crypto as a business activity can cross the AED 1,000,000 natural-person turnover threshold and become liable to register.
Bookkeeping treatments by transaction type
| Transaction | VAT treatment | Bookkeeping treatment |
|---|---|---|
| Sale of crypto to a customer (transfer of ownership) | Exempt | Record AED proceeds at transaction-date value; tag as exempt supply |
| Crypto-to-crypto conversion | Exempt | Revalue the asset at fair value; recognise gain/loss in AED |
| Trading/brokerage fee charged | Standard 5% | Fee revenue with output VAT; recover related input tax |
| Custody/wallet management (from 15 Nov 2024) | Exempt | Tag exempt; apportion input tax |
| Staking or mining rewards | Assess per activity | Recognise at fair value on receipt; document the activity's commercial nature |
| Payroll paid in crypto | N/A | Convert to AED at payment date for WPS/labour compliance records |
A working chart of accounts
Split the ledger into: (1) crypto asset wallets with per-wallet sub-accounts and dated AED valuations; (2) exempt revenue (transfers, conversions) separate from taxable fee revenue; (3) an input-tax apportionment account recalculated each period; (4) a reconciliation bridge from exchange statements to the general ledger, since exchange reports rarely match your transaction dates. Monthly wallet-to-ledger reconciliation is the single control that catches most errors — missing on-chain transfers, duplicated deposits, unrecorded gas fees.
Audit and regulator readiness
Keep the on-chain evidence alongside the books: transaction hashes, wallet addresses, exchange statements and the AED valuation source used at each measurement date. For companies in Dubai's VARA regime, accounting records also feed licensing and prudential reporting, so the ledger must be able to reconstruct any balance at any date. Blockchain analytics or a sub-ledger tool is normally needed once transaction counts pass a few hundred per month.
FAQ
Do crypto companies charge VAT in the UAE? The transfer and conversion of virtual assets are VAT-exempt (retroactive to 1 January 2018); explicit fees and commissions charged for services are standard-rated at 5%.
Can a crypto business recover its input VAT? Only on costs attributable to taxable supplies such as fee income; input tax on exempt activity is generally not recoverable, so apportionment applies.
What currency do the books use? AED. Every crypto movement is recorded with its AED value at the transaction date, with the source of the rate documented.
Finanshels provides bookkeeping services for crypto and blockchain companies, including exempt/taxable revenue tagging and quarterly input-tax apportionment, alongside CFO services for virtual-asset businesses scaling their reporting.
