UAE VAT Law Amended to Exempt Fund Management & Virtual Assets

The government of the UAE updated its value-added tax (VAT) law, introducing exemptions aimed at enhancing the country’s investment climate and supporting economic growth. Notably, investment fund management services will now be exempt from VAT, a move designed to boost the sector.

Additionally, specific services related to virtual assets will enjoy tax exemptions, although the ministry has yet to specify which assets are included.

In a further effort to promote social responsibility, in-kind donations between charitable and governmental entities will be exempt from VAT for values up to Dhs 5 million ($1.36 million) over a 12-month period. This adjustment will allow donors to recover VAT incurred on their contributions, alleviating financial burdens and enhancing the societal role of these organizations.

The revisions to Federal Decree-Law No 8 of 2017 on VAT also empower the Federal Tax Authority to deregister taxpayers under certain conditions, ensuring the integrity of the tax system.

Originally introduced in 2018, the UAE's VAT of 5% was part of a broader strategy to diversify the economy away from oil dependency. Other exemptions already in place cover various financial services, residential properties, and educational and healthcare services, further supporting the business sector.