“Federal Taxation”: Repayment of the “value added” of commercial properties for sales before the transfer of ownership

Media In – Abu Dhabi, July 18,

The Federal Tax Authority renewed its demand for commercial real estate buyers to apply the basic rate of VAT of 5% on the sale or lease of commercial properties, stressing the need for buyers of commercial real estate to complete the payment of VAT before the commencement of procedures for transfer of ownership with the land departments in the UAE. This came during an awareness tour and a number of joint meetings organized by the Authority for Land, Real Estate, Property and Municipalities in the UAE on the simplified electronic procedures and procedures provided by the Authority to pay VAT on sales of taxable commercial properties. Khalid Ali Al Bustani, Director General of the Federal Tax Authority, said in a press release issued today that tax legislation has given special attention to providing an environment conducive to the continued growth and prosperity of the real estate sector in all its fields and activities as one of the most important economic sectors that contribute to achieving government plans to diversify sources of income. Attracting investment. The sale of non-leased commercial properties or the sale on the map of commercial properties according to the building permit is subject to a 5% VAT, as well as rental of commercial properties. However, the property tax paid through the tax declaration can be recovered if the person is registered and entitled to restitution. Recovering the entire building tax that is purchased according to the capital asset system if the cost of the property is more than five million dirhams. Services related to real estate are subject to Value Added Tax (VAT) of 5% of the value of the service, including brokerage, management and real estate consultancy, and according to the normal business rules on taxation. The Federal Law No. 8 of 2017 on Value Added Tax and its Executive Regulations contains many articles that guarantee the continued competitiveness of investment in the real estate sector, whereby the law stipulates that the first supply of residential buildings during the first three years of completion of construction shall be subject to zero, The developer shall recover the tax relating to the expenses incurred on the construction, and the residential buildings shall be exempt from tax after the first supply. For real estate owners who rent their properties for residential purposes, they are not required to register with the Commission. If all purchases made by the trader within the tax-free limits do not require registration