The United Arab Emirates (UAE) has taken a significant leap towards establishing itself as a crypto-friendly nation by exempting cryptocurrency transactions from value-added tax (VAT). This move has garnered praise from Shytoshi Kusama, the mysterious lead developer behind the Shiba Inu cryptocurrency.
Kusama, known for his enigmatic persona, took to X (formerly Twitter) to express his appreciation, using a GIF of Vegeta, a character from the popular anime series Dragon Ball. He even declared the UAE as the “cryptocurrency capital,” emphasizing the nation’s commitment to embracing digital assets.
The UAE’s Federal Tax Authority amended its VAT laws last week, effectively eliminating taxes on the transfer and conversion of virtual assets. Notably, these exemptions are applied retroactively, dating back to January 1, 2018. While the UAE doesn’t impose federal-level income tax on individuals, it does levy a 5% VAT on the purchase of goods and services.
This exemption is the latest in a series of proactive steps taken by the UAE government to position the country as a leading destination for cryptocurrency businesses and investors. Earlier this year, Binance, the world’s largest cryptocurrency exchange, secured a full regulatory license in Dubai, paving the way for the company to offer virtual asset services to a wider range of customers. Last week, Ripple Labs, the company behind XRP, also received in-principle approval to offer blockchain-enabled payment services from the Dubai International Financial Centre (DIFC).
Kusama has previously expressed his admiration for the UAE’s burgeoning cryptocurrency landscape, highlighting its culture and his own connections within the nation. The recent VAT exemption further solidifies the UAE’s commitment to fostering a supportive environment for cryptocurrencies and related businesses, attracting more players to its flourishing digital asset ecosystem.
