The UAE offers a globally competitive tax framework for crypto, featuring 0% Personal Income Tax and Capital Gains Tax. However, once crypto activity is conducted as a business—such as running an exchange, a mining operation, or an NFT studio—profits become subject to the 9% Corporate Tax (CT) rate on income exceeding AED 375,000. Furthermore, the country is implementing the OECD’s CARF for global reporting transparency.
FrankDigit Accounting Services provides the specialized classification and reporting needed to define your tax status accurately and avoid compliance pitfalls. We ensure proper segregation between personal and business crypto activity and utilize the latest VAT exemptions for digital asset transfers. Our adherence to Confidentiality, Transparency, and Integrity (CTI) guarantees your compliance with both the FTA and international tax disclosure standards.
In the UAE, the tax liability for crypto hinges on whether the activity is classified as a personal investment or a structured business operation.
- Individuals: Buying, holding, trading, or staking crypto/NFTs for personal investment remains 100% exempt from Income Tax and Capital Gains Tax.
- Businesses (Taxable Persons): Companies operating a commercial activity involving crypto (exchanges, advisory, mining-as-a-service, token issuance) must:
- Register for CT and pay 9% on net profits over AED 375,000.
- Treat crypto gains and losses as ordinary business income/expense.
This distinction requires clear documentation and strong evidence of the substance over form principle, which we meticulously manage.
We provide the technical and compliance services necessary to structure your crypto earnings for optimal tax efficiency and global transparency.
| Delieverable | How FrankDigit Delivers |
|---|---|
|
CT Business Income Calculation |
Calculating Corporate Taxable Income by accurately recording realized gains/losses and allowable deductions from crypto business operations. |
|
VAT Exemption & Application |
Advising on the correct application of the VAT exemption for transfers, trading, and conversions of virtual assets, and identifying where 5% VAT still applies (e.g., consulting services). |
|
CARF Reporting Readiness |
Structuring internal records and collecting Tax Residency information to prepare for the OECD’s CARF (Crypto-Asset Reporting Framework) data exchange. |
|
Asset Classification & Valuation |
Meticulous classification of all tokens (Intangible Assets vs. Inventory) and ensuring Fair Market Value (FMV) is correctly applied for Corporate Tax reporting. |
|
Free Zone Compliance Vetting |
Ensuring that any crypto income claimed as 0% tax in a Free Zone meets the Qualifying Free Zone Person and economic substance tests. |
The UAE’s commitment to international transparency means that the compliance standards for crypto are among the highest in the market.
The UAE is a signatory to the OECD’s CARF, which will mandate automatic, annual exchange of crypto transaction data with foreign tax authorities starting from 2028. We prepare businesses to become Reporting Crypto Asset Service Providers (RCASPs), implementing the required KYC and data mapping processes now to prevent future non-compliance penalties that arise from data mismatches.
The biggest risk is misclassifying business income as personal capital gains. If the FTA determines that trading or mining activity should have been taxed under CT, the business faces back taxes plus severe penalties: up to 14% annual penalty on the unpaid tax and fixed fines (e.g., AED 20,000 for failure to keep records). We mitigate this risk by documenting clear lines between personal wealth and corporate treasury.
We provide a specialized strategy to ensure your digital asset profits are compliant and tax-efficient.
- Decode (Tax Status Review): We analyze your entire crypto activity stream, corporate setup, and licensing status (VARA/Free Zone) to definitively classify all revenue as personal/exempt or business/taxable.
- Simplify (System Alignment): We configure your accounting systems (sub-ledgers and GL) for accurate cost basis tracking, automate FMV reporting, and implement controls to manage the VAT treatment of all services and transactions.
- Automate (Reporting & Compliance): We prepare your annual Corporate Tax Return with fully verifiable crypto schedules and ensure your systems are ready for future CARF reporting requirements, securing your long-term position.
Is your crypto business structured for optimal tax compliance? Ensure your profits are protected and future-proof.
📞 Contact FrankDigit Accounting Services today for expert UAE Crypto Tax Compliance.