UAE Announces VAT Conversion Standards for Digital Currency Payments

The United Arab Emirates (UAE) has established standards for converting the value of goods and services received in digital currency into dirhams (AED) for value-added tax (VAT) reporting. The UAE Federal Tax Authority (FTA) stated in a guideline dated July 14, 2026, that taxable businesses supplying digital currency or receiving payment in digital currency must convert the corresponding value into AED and reflect it in their VAT returns. Taxpayers are required to select three platforms from the list of centralized digital currency trading platforms published by the FTA, and they must use the same three platforms for all transactions within the same fiscal year. The conversion standard is based on the exchange rate at the time of supply or receipt of payment, calculated as the arithmetic average of the exchange rates verified on the selected platforms. The platforms included in the official guidelines are Binance FZE, Bybit Fintech FZE, Deribit FZE, Bitget, and Payward FZCO. This guideline does not change the VAT rate in the UAE, which has been set at 5% since January 1, 2018. Since the value of legal tender must be determined based on the market price at the time of the transaction, the reporting standards may be uncertain. The FTA aims to address this issue by fixing the three designated platforms and averaging their rates. However, for tokens with low liquidity, securing exchange rates may be challenging, and the FTA will announce separate procedures for such cases.

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