Corporate Tax Update in UAE : Non-Residents to be Taxed on Income from Emirates Property

The UAE Ministry of Finance (MoF) has announced the issuance of a cabinet decision on a non-resident person’s Nexus in the UAE for the purposes of corporate tax.

Foreign companies and other non-resident juridical persons will be subject to Corporate Tax in UAE on income derived from real estate and other immovable property located in the country and will be required to register in the Emirate for corporate tax purposes, the MoF said in a statement.

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Corporate Tax in the UAE – New Update

The new update applies to both immovable property that is held or used in a business and immovable property that is held for investment purposes in the UAE, it said.

Real estate investment income earned from Emirates immovable property owned by foreign or UAE resident individuals, either directly or through a trust, foundation, or another vehicle that is treated as fiscally transparent for purposes of Corporate Tax in the UAE, would generally not be subject to corporate tax provided it is not a licensed business activity, the statement noted.

Real Estate Investment Trusts (REITs) and other Qualifying Investment Funds can avail an exemption from corporate tax on income derived from the investment in UAE immovable property, provided that the relevant conditions are met, it said.

The country started a 9% corporate tax, with relief for SMEs and some free zone activities.

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