FTA issued a VAT public clarification on cryptocurrency mining in the UAE

The document clarifies the following aspects of the taxation:

• Mining for yourself: if a person mines cryptocurrency at his own expenses, it's not considered a taxable activity and not a taxable supply in the UAE, so VAT is not applicable.
• Mining for others: if a person provides mining services to someone else for a fee, this is a taxable activity and VAT is applicable,

The Clarification explains that mining for your own account isn't taxable because there's no identifiable recipient for the activity and no direct payment received.   

However, when you mine on behalf of someone else, there's a clear service recipient and you're receiving payment for your services, making it a taxable activity.

A person engaged in cryptocurrency mining may incur expenses as part of their mining activities, including expenses for purchasing equipment, renting commercial property, utilities, and maintenance:

- Input tax incurred by a VAT registrant mining on behalf of another person may be recovered.
- However, if the person is mining for their own account, the expenses incurred will not be considered incurred for the purpos...