Ministerial Decision reinforces institutional alignment between Dubai’s virtual asset regime and the UAE’s federal tax framework
The UAE Ministry of Finance has issued Ministerial Decision No. 336 of 2025 formally recognising Dubai’s Virtual Assets Regulatory Authority (VARA) as a “competent authority” under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
While the development has tax implications, its broader significance lies in regulatory integration and jurisdictional clarity for virtual asset activities in the UAE.
Consolidation of Regulatory Architecture
VARA was established pursuant to Dubai Law No. 4 of 2022 as the dedicated regulator for virtual asset activities within the Emirate of Dubai (excluding DIFC). Since its creation, VARA has developed a comprehensive licensing and supervisory regime covering exchanges, custodians, brokers, asset managers, advisory firms, and other virtual asset service providers.
By designating VARA as a “competent authority” within the federal corporate tax framework, the Ministry of Finance has effectively embedded Dubai’s virtual asset regulatory regime into the UAE’s national legislative architecture.
This step ensures that:
- VARA’s licensing and supervisory determinations are formally recognised at the federal level.
- Activities regulated by VARA are institutionally aligned with federal compliance standards.
- There is reduced fragmentation between emirate-level regulators and federal authorities.
From a governance standpoint, the decision reflects regulatory maturity in the UAE’s digital asset ecosystem.
Clarifying Jurisdictional Competence
The term “competent authority” under the corporate tax legislation refers to recognised regulatory bodies whose oversight is relevant for determining qualifying activities and compliance status.
The amendment eliminates potential ambiguity regarding:
- Whether VARA-regulated activities are recognised within the federal legislative framework.
- The legal standing of VARA in relation to qualifying fund management and investment management activities.
- Cross-jurisdictional interpretation issues between Dubai-level licensing and federal regulatory application.
For legal practitioners advising digital asset firms, the development provides clearer interpretative guidance when analysing regulatory classification and activity mapping under UAE law.
Regulatory Certainty for Virtual Asset Service Providers
The integration strengthens legal certainty for entities operating under VARA licences, particularly in areas such as:
- Structuring of digital asset businesses
- Cross-border operations and service offerings
- Regulatory disclosures and compliance frameworks
- Interaction between free zone status and federal regulatory requirements
Importantly, the recognition reinforces the principle that sector-specific regulators including those overseeing emerging technologies are not operating in isolation but within a coordinated federal system.
Broader Implications for the UAE’s Digital Asset Framework
The UAE has pursued a dual-track approach to virtual asset regulation: innovation-driven at the emirate level and harmonised at the federal level. The formal inclusion of VARA within the corporate tax framework signals continued institutional consolidation.
For international stakeholders, the development demonstrates:
- Regulatory predictability
- Legislative cohesion
- Strengthening of supervisory legitimacy
As digital asset regulation evolves globally, the UAE’s structured integration of VARA into federal law positions the jurisdiction as one with both specialised oversight and unified legal coherence.
Ministerial Decision No. 336 of 2025 represents more than a technical amendment. It reflects the UAE’s commitment to embedding virtual asset regulation within its broader legislative and institutional framework, reducing regulatory ambiguity and reinforcing the authority of Dubai’s dedicated digital asset regulator within the national legal order.
