Finance

The Saudi Organization for Certified Public Accountants (SOCPA) has referred seven individuals and entities to the Public Prosecution since the beginning of this year following initial monitoring and investigation into suspected offences under Article 10 of the Accounting and Auditing Profession Law.

SOCPA warned that providing false or misleading information can result in imprisonment for up to five years and a fine of up to SR2 million. The organisation also stressed that certified public accountants are responsible for the accuracy of financial reports and information they certify.

Under Article 10, a certified public accountant may commit an offence by certifying financial statements that have not been audited either by the accountant or by employees working under their supervision. Those found guilty of one or more of the offences covered by the article may face imprisonment for up to five years and/or a fine of up to SR2 million, without prejudice to any additional penalties prescribed under other laws.

Offences Covered

The law also criminalises providing false information or forged certificates to obtain a professional licence, as well as misleading the public in any manner about the right to practise the profession.

It further covers cases where a certified public accountant knowingly provides false information or conceals information that is required to be disclosed. Certifying a report that does not reflect the truth or contains false information in a document required by law or professional regulations is also considered an offence.

Other violations include disclosing confidential information relating to an entity for which professional services are provided, providing false information about the qualifications or experience of employees, or assisting in the provision of such information.

SOCPA said the measures form part of its efforts to strengthen compliance with professional and regulatory requirements and address practices that could undermine the reliability of financial information.

The organisation said the reliability of financial reports is a fundamental element of financial health and is important for protecting entities, beneficiaries and users of financial statements.

It also highlighted the role of coordination between the accounting and auditing regulatory system and relevant regulatory and judicial authorities in strengthening compliance, addressing irregular practices and improving the integrity of financial information and the quality of professional services.

The Abu Dhabi Family, Civil and Administrative Cases Court has ordered a man to return Dh99,000 that was mistakenly transferred to his bank account and to pay Dh20,000 in compensation for material and moral damages.

The case arose after the claimant accidentally transferred the amount to the defendant, whose bank account details had previously been saved in the claimant’s banking application.

According to the case documents, the claimant said the defendant was a client of a company he owned. After discovering the mistaken transfer, he repeatedly asked the defendant to return the money, but the defendant allegedly delayed and refused to do so.

The claimant sought an order requiring the defendant to pay Dh100,000, along with Dh30,000 in compensation for the material and moral damages he said resulted from the refusal to return the money. He also sought legal fees and costs.

Money Withdrawn In Two Installments

The claimant said he had mistakenly transferred Dh99,000 from his bank account to the defendant’s account. After discovering the error, he contacted the defendant several times and requested repayment, but the money was not returned.

The claimant subsequently initiated criminal proceedings, resulting in a conviction against the defendant. He told the civil court that the defendant had withdrawn Dh95,000 of the transferred amount in two installments through an ATM.

The claimant argued that the defendant’s refusal to return the money had caused him both financial and non-financial harm.

Criminal Conviction Establishes Liability

The court said the earlier criminal judgment had established the defendant’s conviction, resolving the issue of his responsibility for the conduct.

Based on that judgment and the evidence before it, the court found the defendant liable for the amount that had been mistakenly transferred to his account.

The court therefore ordered him to return Dh99,000 to the claimant and awarded Dh20,000 in compensation for the material and moral damages suffered by the claimant. The court also ruled on the applicable court fees and costs.

The use of cryptocurrency and other digital currencies in commercial transactions has increased significantly in recent years. Businesses in the UAE are increasingly exploring digital currencies as a means of receiving payments, transferring value and engaging in digital-asset-related activities. While these developments create new commercial opportunities, they also raise important questions from a tax and compliance perspective, particularly in relation to Value Added Tax (VAT).

One of the key practical issues for businesses accepting cryptocurrency is determining the value of a transaction for VAT purposes. Although a commercial agreement may provide for payment in Bitcoin, Ethereum or another digital currency, VAT reporting in the UAE must ultimately be completed in UAE dirhams (AED). This creates a challenge because the value of digital currencies can fluctuate significantly, sometimes within minutes.

To provide greater clarity on this issue, the Federal Tax Authority (FTA) issued Directive on Tax Transactions No. 3 of 2026 on the method of converting the value of digital currencies into UAE dirhams for VAT purposes. The Directive applies both to supplies of digital currencies and to transactions in which goods or services are supplied and the consideration is received in digital currency.

The introduction of this framework provides businesses with a more structured approach to valuation and addresses one of the main practical concerns associated with cryptocurrency transactions: determining the appropriate exchange rate to apply when reporting VAT.

VAT Treatment Remains Based On The Underlying Supply

The acceptance of cryptocurrency as consideration does not, by itself, change the VAT treatment of the underlying transaction. The applicable VAT rules continue to depend on the nature of the supply being made.

For example, if a UAE-based business provides taxable consultancy services and receives payment in Bitcoin, the transaction remains subject to VAT in the same manner as if payment had been received in AED. The business must determine the value of the Bitcoin received at the relevant time and use that value when calculating and reporting VAT.

The important consideration is therefore not the form of payment but the value of the consideration received for the taxable supply. The Directive establishes the mechanism for converting that digital-currency value into AED for disclosure in the VAT return.

How The Digital Currency Value Is Calculated

Under Directive No. 3 of 2026, taxable persons must follow a prescribed method for converting digital currency values into AED. A business must select three centralised public digital-currency exchange platforms from the list published by the FTA and use the same three platforms for transactions during the relevant calendar year.

The FTA’s published list currently includes Binance FZE, Bybit Fintech FZE, Deribit FZE, Bitget and Payward FZCO. A taxable person selects three platforms from this list and applies the same selection throughout the calendar year.

The value of the digital currency is then calculated using the numerical average of the exchange rates displayed on the three selected platforms at the date and time relevant to the supply or receipt of consideration, as applicable. This approach is intended to provide a consistent and auditable basis for determining the AED value rather than allowing businesses to select an exchange rate on an individual transaction basis.

For example, where a business receives one Bitcoin as payment for a taxable service and the exchange rates displayed on its selected platforms at the relevant time are Dh400,000, Dh402,000 and Dh398,000, the business would calculate the average of the three rates and use Dh400,000 as the value of the consideration for VAT purposes.

Volatility Creates Practical Challenges

A key practical issue for businesses is the volatility of cryptocurrency values. Unlike traditional currencies, digital currencies can experience significant price movements within short periods. This means that the value of cryptocurrency at the time an invoice is issued may differ from its value when payment is made or when the cryptocurrency is subsequently converted into AED.

The VAT calculation, however, is based on the value determined under the FTA methodology at the relevant date and time of the transaction. A later increase or decrease in the market value of the cryptocurrency does not change the original VAT value.

For instance, if a customer pays one Bitcoin for a taxable service and the value of that Bitcoin at the relevant time is Dh100,000, that amount will form the basis for VAT reporting. If the business later converts the Bitcoin into AED at a lower or higher value because of market fluctuations, the later conversion value will not alter the original VAT calculation.

Record-Keeping Becomes Critical

The introduction of specific valuation rules also highlights the importance of maintaining proper records. Businesses accepting cryptocurrency should retain sufficient documentation to demonstrate how the AED value reported for VAT purposes was calculated.

This includes records of the amount of cryptocurrency received, the date and time of the transaction, the exchange rates obtained from the selected platforms and the calculation used to determine the final AED value. The Directive specifically requires records evidencing the exchange rates obtained from each of the three selected platforms, in addition to the other record-keeping obligations applicable to the transaction.

Blockchain records may confirm that a cryptocurrency transfer occurred, but they may not independently establish the exchange rates used or the basis of the VAT calculation. Businesses should therefore ensure that relevant exchange-rate information is captured at the time of the transaction rather than attempting to recreate the calculation at a later stage.

This will be particularly important in the event of a VAT review or audit by the FTA. A clear audit trail showing the transaction timestamp, selected platforms, applicable rates and resulting AED calculation can help demonstrate how the reported value was established.

Contracts Should Address Digital Currency Risks

In addition to valuation and record-keeping requirements, businesses accepting cryptocurrency should consider the broader commercial implications. Appropriate contractual provisions should address issues such as the agreed cryptocurrency value, timing of payment, responsibility for transaction fees, refund mechanisms and potential risks arising from price fluctuations.

Businesses should also consider carefully how payment obligations are expressed in agreements. Where the commercial arrangement is denominated in cryptocurrency, the parties may need to establish whether the obligation is measured by the quantity of digital currency or by an agreed AED value. Clear drafting can help reduce disputes arising from changes in the cryptocurrency’s market value between agreement, invoicing and payment.

Businesses dealing with less commonly traded digital currencies should also consider whether reliable valuation information is available. Where an exchange rate is not available on the required number of listed platforms, the Directive provides for further guidance from the FTA on the procedures to be followed.

A Structured Approach To VAT Compliance

The FTA’s Directive No. 3 of 2026 represents an important development in the UAE’s approach to digital-currency transactions. By establishing a defined valuation method, the Directive provides businesses with a consistent framework for converting digital currency into AED when reporting transactions for VAT purposes.

For businesses accepting digital currencies, compliance will depend not only on applying the correct valuation methodology but also on maintaining clear evidence supporting the calculation. Businesses should therefore review their VAT procedures, accounting systems and contractual arrangements to ensure that digital-currency transactions are properly captured and reported.

Conclusion

The increasing adoption of cryptocurrency in commercial transactions requires businesses to adopt a careful and structured approach to VAT compliance. While using digital currency as consideration does not alter the VAT treatment of the underlying supply, it introduces specific challenges relating to valuation, record-keeping and evidencing the basis of VAT reporting.

The FTA’s Directive No. 3 of 2026 provides a defined framework for determining the AED value of digital-currency transactions, reducing uncertainty arising from market volatility and inconsistent valuation practices. However, effective compliance will depend on businesses implementing appropriate internal procedures to capture transaction details, exchange-rate data and supporting documentation at the relevant time.

As digital assets continue to develop as part of the UAE’s commercial landscape, businesses accepting cryptocurrency should proactively review their VAT processes, accounting controls and contractual arrangements to ensure that such transactions are properly valued, recorded and reported. A robust compliance framework will be important not only for meeting VAT obligations but also for mitigating potential risks during future tax reviews or audits by the FTA.

The Dubai Judicial Institute (DJI), in partnership with the United Nations Office on Drugs and Crime (UNODC) for the GCC, has launched the second edition of the Contemporary Legal and Judicial Challenges Forum under the theme “Combating Electronic Financial Fraud”.

The forum forms part of DJI’s efforts to strengthen the preparedness of the judicial and legal ecosystem to address rapidly evolving challenges in the digital environment. It brought together senior representatives from judicial and legal institutions, specialised authorities, and financial and digital sectors to examine emerging risks and strengthen cooperation.

The event was attended by Her Excellency Judge Dr Ebtessam Ali Al Badwawi, Director General of DJI, and His Excellency Judge Dr Hatem Aly, Head of Mission and Regional Representative of UNODC for the GCC Region, along with senior representatives of legal and judicial bodies and specialised authorities across the UAE.

The forum provided a platform for dialogue and knowledge exchange, combining judicial expertise, legal analysis, technical insights and international cooperation to examine contemporary challenges linked to electronic financial fraud. It also highlighted the importance of coordinated efforts to protect the integrity of financial systems and uphold the rule of law in the digital age.

Strengthening Judicial Preparedness

Judge Dr Ebtessam Ali Al Badwawi said the second edition reflected DJI’s commitment to raising judicial and legal awareness of emerging challenges, particularly electronic financial fraud, which has become a significant legal and economic threat at both national and international levels.

She said the forum seeks to deepen understanding of such crimes, examine international best practices and strengthen cooperation between judicial institutions and international organisations. Such efforts, she added, support the development of the justice system and Dubai’s vision of creating a resilient and future-ready legal environment.

Al Badwawi said tackling electronic financial fraud requires more than legislative frameworks. It also depends on stronger institutional preparedness, effective investigative and evidentiary tools, improved procedures for handling digital evidence and enhanced international judicial cooperation in addressing transnational crime.

The forum therefore brought together judicial, legal, security, regulatory, financial and digital stakeholders with international specialists to examine practical approaches to combating these offences.

Addressing Cross-Border Threats

Judge Dr Hatem Aly said the forum’s organisation in partnership with DJI was strategically important in addressing contemporary legal and judicial challenges. He noted that UNODC serves as the secretariat of the United Nations Convention against Transnational Organized Crime and the United Nations Convention against Cybercrime.

He highlighted the rapid development of artificial intelligence, the expansion of instant payment networks and the difficulties involved in cross-border prosecution as among the key challenges facing efforts to combat electronic financial fraud.

According to Aly, such offences have evolved from isolated activities into increasingly organised networks that exploit technological developments, including social engineering, cryptocurrencies and digital identity fraud, to develop sophisticated methods of deception.

He said the partnership seeks to facilitate knowledge-sharing and familiarise the judicial and legal ecosystem, financial and banking institutions, digital-sector organisations and other relevant stakeholders with regional and international methods and best practices for addressing these risks.

Examining Emerging Fraud Risks

The forum brought together members of the judiciary, justice policymakers and representatives of financial, banking and digital institutions to strengthen their capacity to develop effective legal responses to emerging challenges.

Discussions focused on the legal dimensions of electronic financial fraud, the challenges facing judicial authorities and financial institutions, and international experiences and best practices in combating such offences.

Sessions examined the evolving nature of cyber-enabled financial fraud, including the technical and digital complexities involved, the importance of international judicial cooperation in tackling cross-border crime, and the UAE’s national framework for combating such offences.

The sessions were led by national and international experts and drew participation from local and federal judicial authorities, financial and digital-sector institutions and banks operating across the UAE.

The broad participation underscored the importance of coordinated action among the justice system, regulatory authorities and financial institutions in responding to emerging legal and technological challenges.

Through the second edition of the forum, DJI reaffirmed its commitment to specialised knowledge initiatives aimed at promoting legal and judicial excellence and strengthening international cooperation.

The institute said such efforts support the development of an agile justice system capable of responding to evolving challenges and contribute to Dubai’s vision of strengthening its position as a global centre for specialised legal and judicial development.

The US Senate failed to advance comprehensive cryptocurrency legislation backed by President Donald Trump, dealing a major blow to digital asset companies and Republicans who had championed the bill for months.

The bill, called the Clarity Act, fell 10 votes short of the 60-vote threshold needed to advance most legislation in the 100-member chamber, as four Republican senators — Jerry Moran, Susan Collins, Josh Hawley and Thom Tillis — joined all Democrats in voting against it. The vote was 50-49 in favour.

The vote effectively put the bill on ice, as Congress is set to leave Washington this month ahead of the November midterm elections, in which Trump's fellow Republicans are fighting to retain control of the House of Representatives and Senate.

Tillis switched his vote from yes to no in a procedural move that preserves his ability to bring the measure back up for reconsideration later.

Senate Republicans on Sunday night released a new version of the bill in a last-ditch effort to address concerns from the banking industry and some Democrats, but opponents were not swayed.

The Clarity Act aimed to create a regulatory framework for digital assets, which crypto companies say would put them on a more solid legal footing. The deep-pocketed industry spent hundreds of millions of dollars campaigning for the bill's passage.

Trump, who has earned more than $1.4 billion from his family's crypto ventures, had urged Congress to pass the legislation. Trump courted financial support from the crypto industry on the campaign trail during the 2024 election, calling himself a "crypto president".

His regulators, particularly the US Securities and Exchange Commission and the US Commodity Futures Trading Commission, will now be positioned to fill the crypto policy void, but efforts to establish favourable rules for the digital asset industry could prove challenging.

Industry experts have said only Congress can create a lasting regulatory framework. Without legislation, regulations will be vulnerable to the shifting political climate and court challenges, creating lingering risks for the crypto industry, executives and analysts said.

"The CLARITY Act didn't advance in the Senate today, which was a disappointment," said Coinbase CEO Brian Armstrong in a social media post on Tuesday after the vote.

"The SEC and CFTC have the tools they need to create clear rules under existing authority, and I expect they will begin working on this in earnest," he added.

The Trump administration's own extensive rollback of dozens of SEC and consumer watchdog policies introduced under former Democratic President Joe Biden has underscored that risk.

Bitcoin, the world's largest cryptocurrency, fell more than 5% as the vote appeared on track to fail, its biggest daily percentage decline since June. Shares of crypto exchange Coinbase and stablecoin issuer Circle fell as much as 10%.

The Abu Dhabi Family, Civil and Administrative Cases Court has ordered a woman to pay her sister Dh340,000 after ruling that she had failed to repay part of a loan received from her.

The court also ordered the defendant to pay Dh20,000 in compensation for the losses suffered by her sister, in addition to court fees and expenses.

The plaintiff had filed a case seeking repayment of Dh340,000, representing the outstanding balance of a larger loan, together with legal and late-payment interest at 9% from the date of filing the case. She also sought Dh200,000 in compensation for material and moral damages, with 5% interest from the date the judgment became final until full payment.

According to the case documents, the plaintiff had lent her sister Dh540,000 in two transfers. The first amounted to Dh500,000, followed by a further transfer of Dh40,000. The defendant subsequently repaid Dh200,000, leaving Dh340,000 outstanding.

The plaintiff told the court that her sister had acknowledged the debt in communications between them and had expressed a willingness to issue a guarantee cheque and repay the outstanding amount in instalments.

The defendant had also proposed resolving the dispute by giving up her share of an inheritance in favour of her sister.

The court found that the defendant had acknowledged receiving the money and that this was supported by her subsequent conduct, including the issuance of a manager’s cheque as security for the outstanding debt.

When questioned about the purpose of the cheque, the defendant said it had been issued to settle the dispute, the court found.

The court therefore concluded that the outstanding debt had been established and ordered the defendant to pay Dh340,000 to her sister.

It also awarded Dh20,000 in compensation for the loss of benefit from the unpaid amount and the material and moral harm suffered by the plaintiff. The defendant was further ordered to bear all court fees and expenses.

The Kuwait Public Prosecution has referred 71 defendants to court over a major corruption case involving agricultural land allocated by the government to citizens, authorities said.

Following lengthy investigations, the prosecution said it had uncovered the misappropriation of around KD8.66 million in public funds, along with allegations of money laundering and other offences.

The investigation established that the defendants were allegedly involved in a range of corruption-related crimes, including bribery, deliberate damage to public funds, forgery of official documents, money laundering and unlawful financial gain, the prosecution said.

The 71 defendants include officials holding senior and supervisory positions, as well as other public-sector employees. The case also involves 28 private-sector legal entities, according to a prosecution statement.

The investigation was based on reports received from the Kuwait Anti-Corruption Authority (Nazaha) and the Financial Intelligence Unit, the statement said.

The alleged offences relate to agricultural land parcels distributed by the Public Authority for Agricultural Affairs and Fish Resources.

In a separate enforcement action, environment police said they had issued 30 citations to smokers for violating the law and another citation to a shop for allowing smoking violations on its premises.

The smokers were caught smoking in enclosed or semi-enclosed areas of Souq Mubarakiya. Each was fined between KD50 and KD100, while the shop faces a fine ranging from KD1,000 to KD5,000.

Meanwhile, the Traffic Department said trucks will be prohibited from using roads during specified daytime periods starting September 1.

Under the restriction, trucks will be barred from driving between 6.30am and 9am and from 12.30pm to 3.30pm each day. The daytime ban will remain in force until June 14 next year.

From June 15 to August 31, 2027, the restriction will apply only during the evening period, the department said.

The Abu Dhabi Family, Civil and Administrative Cases Court has ordered a woman to pay Dh133,400 to a man after receipts and communications between them supported his claim.

The woman had refused to pay the amount, prompting the man to file a lawsuit seeking Dh133,400, along with court fees and other expenses.

In his claim, the man said the woman owed him Dh157,900, comprising Dh133,400 covered by a receipt and a further Dh24,500 confirmed in their communications. He had previously sought a payment order to recover the debt, relying on the receipt as evidence.

The court found that the documents submitted did not show that the woman had settled the Dh133,400 debt. It also rejected her claims, noting that she was required to provide evidence to contradict the facts established by the documents.

The woman also failed to prove any connection between the debt and an alleged partnership. The court found that bank transfers cited by her were unrelated to the documented debt.

The court therefore ordered the woman to pay the man Dh133,400, in addition to the applicable court costs.

Falling behind on personal loan or credit card payments in the UAE can have consequences that go well beyond missed installments. Depending on the terms of the financing agreement and the circumstances of the default, a bank may demand repayment of the outstanding balance, take contractual steps against funds held with it and ultimately pursue court enforcement.

The Central Bank of the UAE regulates personal lending and defines a personal loan as financing for an individual that may be repaid from salary, end-of-service indemnity or another verifiable regular source of income. The regulatory framework also places limits on lending and repayments, including restrictions on deductions from salary and regular income.

A key issue for employees who lose their jobs is the treatment of their end-of-service gratuity. Personal loan documentation approved under the Central Bank framework can require the borrower to arrange for salary and end-of-service benefits to be transferred to the lending bank during the loan period. This means that where gratuity is credited into the account maintained with the lender, the bank may have contractual rights to use those funds towards the outstanding liability, subject to the agreement and applicable law.

The position can become more serious when a borrower’s financial circumstances indicate that future repayment is unlikely. Under the Central Bank’s current definition of default, default may arise from non-payment or an assessment that the borrower is unlikely to repay. For retail borrowers, factors can include the loss or distress of the income source used to repay the facility. A material credit obligation that remains unpaid for more than 90 days is also treated as a default under the Central Bank’s framework.

Loan agreements may therefore contain provisions allowing the lender to treat certain events, such as termination of employment or a significant deterioration in the borrower’s ability to repay, as grounds for demanding the outstanding amount.

Default can also affect the borrower’s credit record and make it more difficult to obtain future loans or credit facilities. The lender may seek repayment through legal proceedings if the debt remains unpaid.

Importantly, imprisonment is not an automatic consequence merely because a person has missed loan installments. However, after a debt has become subject to execution, the UAE Civil Procedure Code permits an execution judge, in specified circumstances, to order detention of a debtor. The law also provides exceptions, including where the debtor provides an acceptable guarantee or identifies sufficient property in the UAE that can be enforced against.

Borrowers facing genuine financial difficulty should therefore avoid ignoring demands from the lender. Negotiating restructuring, revised repayment arrangements or a settlement at an early stage can be preferable to allowing the matter to progress into formal enforcement.

The UAE’s current legal framework also provides mechanisms for dealing with financial distress, although the rules applicable to individuals differ from those governing companies and traders. Personal debts for ordinary family or personal use are not dealt with under the UAE’s current corporate bankruptcy regime in the same manner as business insolvency.

Ultimately, whether a bank can recover a particular amount from salary, gratuity or money held in an account depends on the loan agreement, the nature of the debt, the applicable Central Bank regulations and any court or enforcement proceedings. Borrowers should review their financing documents carefully and seek legal advice before assuming that a bank can automatically take all of their end-of-service benefits.

The Abu Dhabi Family, Civil and Administrative Cases Court has ordered a man to return Dh20,000 to a victim and pay a further Dh3,000 in compensation after he was found to have been involved in a fraud scheme involving the sale of distinguished vehicle number plates.

The case arose after the man contacted the victim online following an advertisement offering distinguished number plates for sale. The victim was persuaded to transfer Dhs20,000, which was subsequently misappropriated.

The victim filed a civil lawsuit seeking the return of the money, along with Dh15,000 in compensation for the material and moral damages he said he had suffered. He also sought reimbursement of legal fees and expenses.

The court heard that the victim had previously reported the matter to the competent authorities. The defendant was subsequently referred for criminal trial on charges of conspiring with an unidentified person to defraud the victim and obtain his money through deception.

According to the case details, the unidentified accomplice had published an online advertisement offering the number plates and later sent messages to the victim asking him to transfer the payment to the defendant's bank account. The money was then obtained through the fraudulent scheme.

A criminal judgment was subsequently issued against the defendant and became final and binding. In the civil proceedings, the court found that the defendant was liable to return the Dhs20,000 taken from the victim.

The court also awarded Dh3,000 in compensation for the material and moral harm suffered by the victim, including being deprived of the use of his money, expenses incurred and the psychological distress resulting from the fraud.

The court therefore ordered the defendant to pay a total of Dh23,000 to the victim, in addition to the applicable legal costs and expenses.