VAT on Commercial Properties in the UAE

Jun 2019

The implementation of VAT has been one of the turning points for the UAE market. It is quite well known that the Value Added Tax, commonly known as consumption tax, is an indirect tax which gets applied on the goods and services consumed. Although the concept of VAT in UAE has been adopted to fetch new revenue source for the country, still it has raised different types of queries in the minds of investors, entrepreneurs, as well as local people involved in the business domain. However, a confusion that still prevails is that ‘Is VAT applicable on Commercial Properties?’ The query stands as a valid one because commercial properties play an important part in business world. If you hold the same query, then do read this article.

VAT & Commercial Properties in the UAE

The concept of VAT was implemented on 1st Jan 2018, at 5% to fetch in more revenue for the economy. This compelled each party involved in the goods and services business to pay tax. The commercial properties have got a large market when it comes to the UAE. Real estate stands as one of the top business sectors. Now, according to the reports published, the commercial properties of the holders in the UAE are not exempted from tax. This means that no matter whether the property you hold has been purchased, or has been taken under lease, the tenants, purchasers need to bear tax. This mandates for each person involved in this domain to pay a VAT at 5%.

Issuance of Tax Invoice

While carrying out the process of implementing VAT for commercial properties, a tax invoice needs to be issued by the seller to the purchaser, while selling the property.

Registration Process for VAT

It is to be noted that both sellers and buyers needs to be register for VAT. The minimum threshold for VAT registration is Dh 375,000. Now, if the annual rent exceeds the threshold, it becomes a compulsion for the seller to register for VAT, expecting the purchaser to take the first move to declare the same on the Federal Tax Authority’s E-Service Portal.

Documents Required for the Purchaser

The documents that are required from the purchaser takes the following into count:

  • Seller’s Tax Registration Number
  • The VAT Amounts
  • The Commercial Plot Number
  • Date of Sale
  • Department of Land, where the property is registered

Once the documents mentioned-above have been presented, the registration process gets initiated.

Benefits of Availing the Professional VAT Services

Taking the help of experts serves to be the best solution in terms of implementing the VAT services. By outsourcing the VAT services to the experts you can gain the following benefits.

  • Lessen the possibility of errors
  • Gives high-accuracy results at a faster pace
  • You can utilize your resources for future planning
  • Expert’s advice helps the business to expand further
  • Negligible defects can be figured out and fixed perfectly
  • Reduces the burden regarding the implementation of VAT process

It is to be noted that the completion of the process takes time if done manually, and therefore it is advised to take the help of an expert professional who can guide you all along the way. At JAXA, we are dedicated to provide the best VAT consultant services to our preferred clients. Our VAT experts takes the opportunity to understand your business closely and then provide customized solutions. If you want to avail VAT services for commercial properties, we are here to help you. To know how, do contact us-we’d be glad to assist.