UAE ratifies the Crypto-Asset Reporting Framework MCAA

The UAE continues its commitment to enhancing international tax transparency and cooperation by taking another significant step toward the global regulation of digital assets. The UAE has officially ratified the Multilateral Competent Authority Agreement on Automatic Exchange of Information pursuant to the Crypto-Asset Reporting Framework (CARF MCAA) after signing it in July 2025.

The UAE Ministry of Finance has confirmed that the new framework will go live on 1 January 2027, with the first automatic exchanges of data scheduled for 2028.

The Crypto-Asset Reporting Framework (CARF) is an international standard developed by the OECD in conjunction with G20 countries. Its primary objective is to combat cross-border tax evasion by introducing standardized reporting and automatic exchange of information regarding crypto-asset transactions.

Key highlights & practical implications

The CARF MCAA establishes the foundation for the automatic annual exchange of information between the Competent Authorities of participating jurisdictions, represented in the UAE by the Ministry of Finance. Key aspects include:

Scope of reporting

The CARF applies to Reporting Crypto-Asset Service Providers (RCASP). Under the framework, an RCASP is any individual or entity that, as a business, provides services effectuating exchange transactions in Relevant Crypto-Assets for or on behalf of customers, including by acting as a counterparty, or as an intermediary, in such exchange transactions, or by making available a trading platform. Practically, this definition covers exchanges, brokers, custodians and wallet providers that facilitate in-scope crypto-asset transactions on behalf of customers.

The CARF MCAA mandates RCASPs to apply due diligence procedures and report specific information on Relevant Crypto-Assets and Relevant Transactions.

A Relevant Crypto-Asset is any Crypto-Asset that is not a Central Bank Digital Currency, a Specified Electronic Money Product or any Crypto-Asset for which the RCASP has adequately determined that it cannot be used for payment or investment purposes.

Relevant Transactions include:​

• Exchange between Relevant Crypto-Assets and fiat currency
• Exchange between one Relevant Crypto-Asset and another
• Transfers of Relevant Crypto-Assets, and​
• Payments for goods or services made in Crypto-Assets where the value of the transaction exceeds USD 50,000

Information to be exchanged

User details

Competent Authorities will automatically exchange data regarding reportable users. For individuals, this includes the user’s name, address, jurisdiction (s) of residence, tax identification number (TIN), and date and place of birth. For entities, the framework requires the identification and reporting of their controlling persons.

Transaction details

RCASPs must provide detailed breakdowns of transactions, including the aggregate gross amount paid and received for acquisitions and disposals against fiat currency and other Relevant Crypto-Assets. The framework also covers Reportable Retail Payment Transactions and specific Transfers to unhosted wallets where the provider does not know whether the wallet is associated with a financial institution or another virtual asset service provider.

Confidentiality and data safeguards

The CARF MCAA heavily relies on the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, ensuring that all exchanged information remains strictly confidential and is used solely for the tax purposes outlined in the convention.

Penalties for non-compliance

• A fine of AED 20,000 for providing inaccurate or incorrect information during the self-certification process
• A fine of up to AED 50,000 for reporting financial institutions failing to submit reportable account information
• A fine of up to AED 250,000 for reporting financial institutions that violate applicable provisions with the intent to circumvent the regulations

How BaOne can help

• Assess your company’s readiness and compliance obligations under the upcoming CARF UAE regulations
• Analyze the broader tax implications of cross-border transactions involving digital assets
• Provide comprehensive advice on UAE corporate tax, particularly for virtual asset service providers operating within free zones or under the supervision of specific regulatory authorities like VARA, DFSA or FSRA
• Assist in aligning corporate structures and due diligence procedures with new global reporting standards