UAE Corporate Tax : Real Estate

Starting from June 1, 2023, the United Arab Emirates has implemented a Corporate Tax and has set a deadline of one year for both local and foreign companies to complete their registration, as failing to do so will lead to penalties.

On the 5th of June, The UAE’s Ministry of Finance has recently announced that Cabinet Decision No.56 of 2023 has been issued regarding the nexus of non-resident individuals in the country for the purpose of Federal Decree-Law No. 47 of 2022.

As per the statement released, foreign organisations and non-resident legal entities will have to pay a Corporate Tax of 9% on any revenue generated from real estate and other forms of immovable property in the UAE.

Moreover, these entities will have to enrol for Corporate Tax purposes in the UAE. The regulation applies to both fixed assets utilised in any business activities and fixed assets held for investment purposes in the UAE.

According to Younis Haji Al Khoori, who holds the position of Undersecretary of the Ministry of Finance, the way in which foreign companies are taxed on their income from immovable property in the UAE adheres to global standards. These standards dictate that income from immovable property should be taxed in the country where the property is situated.

Exemption

Income generated from real estate investments made by either UAE or foreign residents through trusts, foundations or other fiscally transparent vehicles will not be subjected to Corporate Tax if it is not a licensed business activity. Provided that conditions are met.

The UAE’s legislation will guarantee impartiality between domestic and foreign businesses that generate revenue from immovable assets.

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To stay informed about changes in CT or legal regulations, you can get in touch with Dawia Family Office for the latest updates. Follow us or contact us to learn more and ensure that you are up to date with the most recent rules.

Sources

UAE announces Corporate tax rules for non-resident person’s nexus

Corporate Tax – Ministry of Finance – United Arab Emirates

UAE corporate tax: Ministry clarifies tax on real estate, immovable property – News | Khaleej Times

UAE Corporate Tax law widens scope, adds income from property for non-residents

UAE corporate tax: Ministry clarifies tax on real estate, immovable property