The UAE Federal Tax Authority (FTA) has issued a new directive establishing a three-step conversion mechanism to value cryptocurrencies in dirhams for VAT purposes. Businesses must now select three FTA-approved exchanges, calculate the average rate at the time of the transaction, and then convert the value into dirhams for VAT reporting. The approved exchange list includes Binance, Bybit Fintech, Deribit, Bitget, and Payward. According to Chainalysis, 56 billion dollars in crypto value was received between 2024 and 2025, representing a 33% year-on-year increase, while transactions below 1,000 dollars rose by 88.1%. This directive fills an eight-year regulatory gap without changing the 5% VAT rate in place since 2018.
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