Directive 3 of 2026 sets out how digital currencies are converted into dirhams for VAT: the average of three exchanges chosen from a closed list approved by the tax authority, the same three for twelve months, at the exact time of the transaction. Anyone who has been picking the most favourable rate each time is offside.
What happened
Directive 3 of 2026, published by the Federal Tax Authority (FTA) on 17 July 2026, sets out how a taxable person supplying digital currency, or receiving digital currency as consideration for goods and services, must report those amounts in dirhams on the VAT return. The taxpayer must select three platforms from a closed list of exchanges approved by the Authority — among them Binance FZE, Bybit Fintech FZE, Deribit FZE, Bitget and Payward FZCO — and use the same three for the entire calendar year. The dirham value is the average of the three rates observed at the exact time of the transaction.
What changes in practice
The freedom to choose a rate after the fact is gone. The Directive exists precisely to prevent selective use of exchange rates: the choice of platforms is made once a year and binds for twelve months, including the months when it works out worse. The burden of proof changes too: timestamped records of the rates must be retained, and without that timestamp the declared value is not defensible.
Who it applies to
UAE companies registered for VAT that receive payment in cryptocurrency or stablecoins, whether directly or through a payment processor; digital asset businesses; e-commerce and service providers accepting stablecoin payments; and anyone supplying digital currency in the course of business.
The exposure
A challenge does not hit the single transaction but the entire period, if the choice of platforms is undocumented or changed mid-year. It is the kind of error that accumulates quietly for twelve months and surfaces all at once.
What to do now
Establish whether the company has any digital currency receipts or supplies, including occasional ones. Choose the three platforms for the current year and record that choice in writing, with the date it was made. Put timestamped rate capture in place. Businesses with unresolved crypto transactions from the 2018 to 2020 period reportedly face a window closing on 31 December 2026; that deadline should be verified against the official text before it is relied on.
Sources
- https://tax.gov.ae/en/legislation/vat.aspx
- https://aurifer.tax/uae-fta-issues-vat-directive-on-the-conversion-of-digital-currency-values-into-uae-dirham/
Published 19 August 2026 on the basis of public sources and official United Arab Emirates instruments. This is not legal or tax advice. Verify your position with a qualified professional before acting.