UAE Ministry of Finance Designates VARA as Competent Authority Under CIT Framework

The UAE Ministry of Finance has issued Ministerial Decision No. (336) of 2025, officially adding VARA (Virtual Assets Regulatory Authority) in Dubai to the list of competent authorities under the country’s CIT (Corporate Income Tax) legislation. This is an important development for businesses operating in the virtual assets space, and one that brings greater clarity to how certain activities are treated for tax purposes.

Here is what the decision means and why it matters for your business.

What Has Changed?

VARA was established in Dubai under Law No. (4) of 2022 as the dedicated regulator for virtual asset service providers. With this new ministerial decision, VARA has now been formally included in the definition of “competent authority” as set out in Ministerial Decision No. (229) of 2025. That earlier decision deals with Qualifying Activities and Excluded Activities for the purposes of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses, commonly referred to as the UAE CIT law.

In practical terms, this means that VARA is now recognised alongside other regulatory bodies when determining whether certain financial services qualify as Qualifying Activities under the CIT framework.

Which Activities Does This Affect?

The designation specifically relates to two categories of Qualifying Activities: fund management services and wealth and investment management services.

For businesses licensed and regulated by VARA that provide these types of services, the decision confirms that their regulatory oversight by VARA is sufficient for the purposes of meeting the “competent authority” requirement. This is relevant when assessing whether income from these activities may benefit from preferential tax treatment available to qualifying free zone persons under the UAE CIT regime.

Why Does This Matter?

Before this decision, there may have been uncertainty about whether VARA-regulated entities could rely on their VARA licence to satisfy the conditions for Qualifying Activities. The inclusion of VARA removes that ambiguity.

For companies in Dubai’s growing virtual assets ecosystem, this brings several practical benefits. It provides regulatory and tax alignment, meaning businesses regulated by VARA no longer need to question whether their regulator is recognised under the CIT framework. It also offers potential tax efficiency, since entities carrying out qualifying fund management or wealth and investment management activities under VARA supervision may be eligible for the 0% CIT rate available to qualifying free zone persons, subject to meeting all other very strict conditions. Finally, it reinforces the UAE’s commitment to creating a coherent and supportive environment for digital assets and fintech businesses, which strengthens the country’s broader positioning as a global hub for financial innovation.

What Should You Do Next?

If your business is licensed by VARA and you provide fund management or wealth and investment management services, it is worth reviewing your CIT position in light of this decision. Specifically, consider whether your activities now qualify as Qualifying Activities under the CIT law, whether your entity meets the conditions to be treated as a qualifying free zone person, and how this may affect your overall CIT obligations and planning.