A taxable person in the UAE that accepted payment in a digital currency in July 2026 now has a prescribed way to state that amount in dirhams: select three exchange platforms from a list published by the Federal Tax Authority, use the same three for every transaction in the calendar year, and take the numerical average of their rates at the date and time of the supply. That mechanism arrived in one of four directives on tax transactions issued between 8 and 20 July 2026, and one of the four binds from 1 August 2026.

What VAT directives the Federal Tax Authority issued in July 2026

Four directives on tax transactions for Value Added Tax carry July 2026 dates on the Authority’s legislation pages. Directive No. 2 of 2026 was issued on 8 July 2026, Directive No. 3 of 2026 and Directive No. 4 of 2026 on 14 July 2026, and Directive No. 5 of 2026 on 20 July 2026 (per the Federal Tax Authority legislation pages, as of 31 July 2026).

Each carries the same signature block and the same publication clause: publication in the Official Gazette. Only one of the four states a separate commencement date in its own text. Symbol Consulting treats the commencement of the other three as a point to confirm against the Official Gazette rather than to infer from the issue date.

Directive No. 2 of 2026: adjustments after leaving a Tax Group

Directive No. 2 of 2026 addresses a person who leaves a Tax Group but remains registered for VAT. Adjustments relating to taxable supplies made or expenses incurred before leaving, where the group had declared them in its own returns, are made by that registrant in its returns (per Directive on Tax Transactions No. 2 of 2026, issued 8 July 2026, as of 31 July 2026).

The directive names what counts as an adjustment: reductions in the value of taxable supplies previously declared in the group’s returns, and reductions in the value of taxable expenses on which input tax was previously recovered through those returns. It also requires the registrant to retain the supporting documents evidencing that the adjustments relate to items previously declared by the group. Its text states that it is effective from 1 August 2026, which makes it the only one of the four with a date of its own.

Directive No. 3 of 2026: converting digital currency consideration into dirhams

Directive No. 3 of 2026 applies to a taxable person supplying a digital currency, and to one supplying goods or services paid for in a digital currency. The value is converted into UAE dirhams for disclosure in the tax return, through a mechanism set out in three steps (per Directive on Tax Transactions No. 3 of 2026, issued 14 July 2026, as of 31 July 2026).

  • Select three exchange platforms from the list published by the Authority, and use the same three for all transactions carried out during the same calendar year.
  • Take the exchange rates of the digital currency on those three platforms, prevailing at the date and time of the supply or of receipt of the consideration, as the case may be.
  • Convert using the numerical average of the three rates.

The list annexed to the directive names five centralised public digital currency exchange platforms: Binance FZE, Bybit Fintech FZE, Deribit FZE, Bitget and Payward FZCO. A separate clause requires the taxable person to retain records proving the rates obtained from each of the three platforms, in addition to the ordinary record-keeping obligations for the supply.

Directive No. 4 of 2026: which life insurance fees sit inside the exempt supply

Directive No. 4 of 2026 treats services connected with a life insurance or reinsurance contract as part of the exempt supply, where they are necessary for that supply, directly connected with its provision or transfer, and their consideration is an integral part of the total consideration under it, under Article 42 of the VAT Executive Regulation (per Directive on Tax Transactions No. 4 of 2026, issued 14 July 2026, as of 31 July 2026).

The directive adds a condition on how the amount is charged: the exemption applies only where the fees are included within the insurance premium and no separate consideration is charged for those services. Fees related to the management, operation or execution of the contract may qualify. Services that are independent in nature, or for which separate amounts are charged, are separate supplies, and the determination rests on the facts and circumstances of each case.

Directive No. 5 of 2026: how the value of a deemed supply of services is built

Directive No. 5 of 2026 sets the value of a deemed supply of services at the total direct and indirect costs on which input tax was incurred, for the purposes of Article 37 of the VAT Law, and prescribes a four-step calculation to reach that figure (per Directive on Tax Transactions No. 5 of 2026, issued 20 July 2026, as of 31 July 2026).

The steps run from the open market value of the services, or of comparable services where that value cannot be determined, through division by one plus the net profit margin to strip out profit, then the percentage of costs carrying input tax against total costs in the previous financial year, and finally the application of that percentage to the estimated total cost. The net profit margin comes from the taxable person’s financial statements for the preceding financial year, and where it cannot be determined, the average margin prevailing in the sector may be used.

The bottom line

One question in the July 2026 set is left open by the text itself. Clause 4 of Directive No. 3 of 2026 states that the Authority will publish a clarification on what to do where a digital currency rate is unavailable on three of the listed platforms. With five platforms listed, a taxable person holding a currency quoted on fewer than three has a conversion obligation and no prescribed mechanism until that clarification appears.

No date for it is given in the directive, and none had been published at the date of this review.

This material is a general analysis of published rules. It is not legal, tax, immigration or financial advice.