New VAT rules for cryptocurrency mining in the UAE

On 14 January 2025, the UAE Tax Authority issued a clarification on the application of VAT to cryptocurrency mining (VATP039).

Key points:

1. Mining for yourself: If a company mines cryptocurrency for its own needs, the resulting cryptocurrency is not subject to VAT. This is because the calculations are for the benefit of the entire blockchain, not specific users. The cryptocurrency goes to the one who correctly calculated the block hash first. There is no identifiable customer, so there is no supply — and, for the same reason, input VAT on equipment, premises and electricity used for such mining cannot be recovered.
2. Mining for others: If a company mines cryptocurrency on behalf of another person for a fee, that is a taxable supply of services. VAT is charged at 5% when the customer is in the UAE; supplies to non-resident customers can be zero-rated if all the conditions of the VAT law are met. Important: a miner providing such services can deduct VAT paid to suppliers (input VAT). This applies to the extent that the goods and services purchased by the miner are related to the taxable mining activity.
3. Purchase of mining services: The purchase of mining services in the UAE is subject to VAT. If the services are provided by foreign miners, the tax is accounted for by the buyer under the reverse charge mechanism when the buyer is registered for VAT; if the buyer is not registered, the foreign miner has to register in the UAE and charge the tax. There are legal ways to reduce VAT when purchasing miner services in the UAE.

"The UAE Tax Authority has clarified the tax rules for UAE-registered companies engaged in cryptocurrency mining. In addition, the new clarification follows recent changes to UAE tax rules, which exempt cryptocurrency transactions from VAT."

That exemption came from Cabinet Decision No. 100 of 2024, which took the transfer and conversion of virtual assets out of VAT retroactively from 1 January 2018. VATP039 draws the boundary: mining is not covered by it.

As of August 2026, VATP039 is still the operative guidance and has not been withdrawn or replaced, and the standard UAE VAT rate remains 5%.

By contacting us, you will receive:

• Advice on tax regulation of cryptocurrency mining in the UAE.
• Analysis of tax risks and strategies for minimizing VAT when purchasing mining services.
• Support for the process of registering a company in the UAE for cryptocurrency mining activities and obtaining the appropriate license.
• Support in processing tax deductions for incoming VAT.
• Development of compliance solutions to comply with local legislation and prevent sanctions.