UAE sets VAT conversion method for digital-currency transactions

Three exchange rates must be averaged

The directive applies where a taxable person supplies digital currency or receives digital currency as consideration for another supply. For VAT-return purposes, the person must select three exchanges from the FTA’s published list and calculate the numerical average of their rates at the date and time of the supply or receipt. That average is then used to convert the digital-currency value into UAE dirhams.^[1]

The choice of exchanges lasts for the calendar year

The same three exchanges must be used throughout the calendar year. The FTA list names Binance FZE, Bybit Fintech FZE, Deribit FZE, Bitget and Payward FZCO. Taxable persons must retain evidence of the rates used. If fewer than three listed exchanges provide a rate at the relevant time, the FTA will issue a public clarification specifying the alternative method.^[1][5]

The directive is a valuation and reporting rule

Federal Decree-Law 8 of 2017 defines consideration broadly and requires foreign-currency amounts shown on a tax invoice to be converted at the Central Bank rate applying at the date of supply. The current Executive Regulation separately exempts transfers and conversions of virtual assets, including virtual currencies, while keeping explicit fee, commission, discount or rebate activities taxable. Directive 3 should therefore not be read as making every digital-currency transaction taxable; it supplies the conversion method where an AED value is required for VAT reporting.^[2][4][1]

Controls should capture transaction time and retained evidence

Groups receiving or supplying digital currency should fix their three-exchange selection for each calendar year, preserve timestamped rate evidence and align the calculation with VAT-return workpapers. The directive was issued on 14 July 2026 and the FTA register records publication on 17 July. It requires Official Gazette publication but states no separate commencement date, so the effective date remains unconfirmed rather than inferred.^[1][5][3]