The UAE sets rules for taxes on real estate investments - Arabian Business. | Blog

The UAE sets rules for taxes on real estate investments - Arabian Business.

New tax regulations for real estate investments have been adopted in the UAE.

The Ministry of Finance of the UAE has published rules for taxing income from real estate investments in the country.

The rules were announced in a cabinet decision that clarifies the provisions regarding real estate across the United Arab Emirates. The document specifies whether foreign companies and property owners residing outside the country are required to register their investments for tax purposes.

Taxation rules and real estate in the UAE

The Ministry of Finance of the UAE has announced the issuance of Cabinet Resolution No. 56 of 2023 regarding the connection of non-residents with the UAE for the purposes of Federal Law No. 47 of 2022 on corporate and business taxation. Foreign companies and other non-residents will be required to pay corporate tax on income derived from real estate and other immovable properties located in the UAE, and they will be obligated to register in the UAE for corporate tax purposes. This applies to both properties used for business and properties acquired for investment purposes in the UAE.

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Non-resident legal entities owning property in the country are required to pay income tax based on net income. When calculating the tax base, relevant expenses that meet the conditions set by the Corporate Tax Law can be taken into account. Income from investments in real estate, derived from properties owned by foreigners or residents, whether directly or through trusts, funds, or other mechanisms, is subject to corporate tax if it constitutes licensed business activity. Additionally, real estate investment funds and other qualified investment funds may be exempt from corporate tax on income from investments in real estate in the United Arab Emirates, provided they meet the relevant requirements.

Yunis Khadji Al Khouri, the Deputy Minister of Finance, said:“Corporate taxation of income from real estate and other immovable property in the UAE by foreign legal entities complies with international standards, which stipulate that income from real estate is taxed in the country where the property is located.”"The UAE corporate tax law includes provisions that adhere to the principles of international taxation and ensure neutrality between domestic and foreign companies earning income from real estate in the UAE."

All cabinet decisions, ministerial decisions, and guidelines related to corporate tax law are available on the official website of the Ministry of Finance. For the latest business news from the UAE and Gulf countries, follow us on Twitter and LinkedIn, like us on Facebook, and subscribe to our YouTube channel, which is updated daily.