[Global IDT Insights] UAE FTA Clarifies VAT Treatment on Cryptocurrency Mining

Editorial Team – [2025] 172 taxmann.com 257 (Article)

The UAE Federal Tax Authority has issued a Public Clarification detailing the VAT treatment of cryptocurrency mining. Under the proof-of-work mechanism, an individual may mine cryptocurrency either for personal purposes or on behalf of another party by providing computational power or access to data farms. Cryptocurrency mining conducted for one’s own account does not qualify as a taxable supply and, therefore, falls outside the scope of VAT. However, mining performed on behalf of another person, such as by supplying computational power, is deemed a taxable supply of services.

Regarding input tax, expenses incurred by individuals mining for their own account are not eligible for VAT recovery, as these costs are not associated with a taxable supply. Conversely, if a VAT-registered entity mines on behalf of another party, input tax on related expenses may be recovered to the extent that they contribute to making a taxable supply.

Click Here To Read The Full Article