Key Takeaways
- • UAE implementation of the Crypto-Asset Reporting Framework (CARF) begins on 1 January 2027, with the first automatic information exchanges scheduled for 2028 covering 2027, according to Ezat Alnajm, CEO of Tulpar Global Taxation.
- • Alnajm urges investors to treat crypto wallets "as your bank account," maintaining records that link each wallet transaction to the underlying agreement, counterparties and source of funds.
- • Tax outcomes depend on activity rather than profit size alone: personal investment, trading businesses, mining and exchange services require separate analysis, and paying UAE tax does not automatically settle liabilities in other jurisdictions.
- • Alnajm identifies friction where a crypto transfer and its matching fiat bank payment are handled through separate processes, citing a peer-to-peer USDT case in which a payment was reversed after an alleged fraud claim.
- • Alnajm calls for banks, fund managers and family offices to build staff expertise in crypto activity and blockchain screening before accepting transfers.
Summary
Ezat Alnajm, CEO of Tulpar Global Taxation, told Hubbis that the growing integration of crypto-assets into the financial system places greater responsibility on investors and their advisers. Tulpar advises companies, family offices and foundations on tax, finance and digital assets, including crypto mining, over-the-counter trading and exchanges. Alnajm argues that a wallet balance is only part of the picture: clients must explain how their wealth was created, where transactions took place and which jurisdictions may claim tax on the resulting income.
On CARF, Alnajm stresses preparation before reporting begins. UAE implementation starts 1 January 2027, with first automatic exchanges in 2028 in respect of 2027. Reporting crypto-asset service providers will collect specified customer and transaction information and report annually to the UAE Ministry of Finance. The framework operates by reference to tax residence rather than nationality, and it is not a universal feed of every wallet transaction. Family offices and wealth managers, particularly those with multi-country links, have a role in aligning tax-residence information with explanations of clients' crypto activity.
Alnajm cautions against assuming that UAE residence means tax-free crypto wealth. He distinguishes personal investment from business activity: according to the article's summary of UAE rules, corporate tax applies to business activity where annual turnover exceeds AED1 million, while qualifying personal investment income is excluded, and a large gain alone does not establish that an individual is carrying on a business. VAT treatment also varies by supply, with self-account mining outside scope and computational power provided to customers generally taxable. Double taxation treaties may determine taxing rights, but UAE tax payment does not guarantee no further liability elsewhere.
Alnajm also highlights operational friction between crypto and banking. He describes clients using stablecoins such as USDT and USDC in peer-to-peer trades, where the two legs of a transaction can be hard to reconcile during disputes. In one case he recounts, a seller transferred USDT through Binance and received a corresponding bank payment; the buyer then alleged fraud, the payment was reversed and the seller faced a restriction on Binance. He argues compliance teams need to understand how the crypto transfer relates to fiat flows, noting that crypto involvement alone does not establish criminality and supporting documents do not automatically make a transaction lawful.
His priorities for institutions are education, blockchain screening and specialist support. Public wallet addresses can reveal transaction histories, and specialist tools can flag sanctions exposure, though a visible history does not identify the wallet's controller or confirm lawfulness. Alnajm expects blockchain to play a much larger role in finance and warns that institutions that fail to adapt risk losing business.
On CARF, Alnajm stresses preparation before reporting begins. UAE implementation starts 1 January 2027, with first automatic exchanges in 2028 in respect of 2027. Reporting crypto-asset service providers will collect specified customer and transaction information and report annually to the UAE Ministry of Finance. The framework operates by reference to tax residence rather than nationality, and it is not a universal feed of every wallet transaction. Family offices and wealth managers, particularly those with multi-country links, have a role in aligning tax-residence information with explanations of clients' crypto activity.
Alnajm cautions against assuming that UAE residence means tax-free crypto wealth. He distinguishes personal investment from business activity: according to the article's summary of UAE rules, corporate tax applies to business activity where annual turnover exceeds AED1 million, while qualifying personal investment income is excluded, and a large gain alone does not establish that an individual is carrying on a business. VAT treatment also varies by supply, with self-account mining outside scope and computational power provided to customers generally taxable. Double taxation treaties may determine taxing rights, but UAE tax payment does not guarantee no further liability elsewhere.
Alnajm also highlights operational friction between crypto and banking. He describes clients using stablecoins such as USDT and USDC in peer-to-peer trades, where the two legs of a transaction can be hard to reconcile during disputes. In one case he recounts, a seller transferred USDT through Binance and received a corresponding bank payment; the buyer then alleged fraud, the payment was reversed and the seller faced a restriction on Binance. He argues compliance teams need to understand how the crypto transfer relates to fiat flows, noting that crypto involvement alone does not establish criminality and supporting documents do not automatically make a transaction lawful.
His priorities for institutions are education, blockchain screening and specialist support. Public wallet addresses can reveal transaction histories, and specialist tools can flag sanctions exposure, though a visible history does not identify the wallet's controller or confirm lawfulness. Alnajm expects blockchain to play a much larger role in finance and warns that institutions that fail to adapt risk losing business.
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