GulfBase Live Support
The 5 per cent VAT on commercial real estate must be paid prior to the completion of an asset sale, not afterwards, the UAE’s Federal Tax Authority (FTA) said on Wednesday.
In a statement clarifying the rules around payment of the levy on property transactions, the FTA urged buyers “to pay the due VAT before proceeding with the transfer of ownership”.
“The tax laws aim to provide a suitable environment for the continued growth and prosperity of the real estate sector – one of the most important economic sectors in the government’s plans to diversify sources of income, and one of the most attractive sectors for investors,” the FTA said.
The UAE, along with Saudi Arabia, introduced a 5 per cent tax on certain goods and services on January 1, to help offset the effects of lower oil prices in the past three years. The UAE and Saudi Arabia are the only GCC states to introduce VAT and excise taxes to date, although all member countries have signed up to implement the levies by next year.
The sale of un-rented commercial properties, as well as off-plan sales and rental of commercial real estate, is subject to the 5 per cent VAT. However, taxes paid on the property’s expenses during a specified rent period can be recovered through the tenant’s tax return, the FTA’s statement said.
Real estate-related services, including brokerage, are also subject to a 5 per cent VAT.
“All other property [including residential] is either not subject to or exempt from the 5 per cent VAT,” FTA director-general Khalid Al Bustani said. Residential buildings whose construction was completed a maximum of three years earlier are subject to zero-rated tax, allowing the owner or investor to reclaim taxes on construction expenses.
The Islamic Corporation for the Development of the Private Sector (ICD, Aa3 stable) benefits from a robust capital position and strong liquidity, although its weak asset quality remains a challenge,
Governor of the Saudi Customs General Authority Ahmad bin Abdulaziz Al-Hakbani visited Jadidat Arrar Customs Port on Sunday (Aug. 4, 2018) to oversee preparations taking place for welcoming Haj pilgr
The UAE, which leads the Arab region in terms of competitiveness, and is home to many tech firms, needs to increase efforts to expand the use of latest digital technologies to further enhance its dom
Banks operating in the UAE will observe a four-day holiday on the occasion of Eid Al Adha. The Central Bank of UAE (CBUAE) has notified banks that the holidays will start on Monday, August 20, and th
Qatar pledged $15 billion (Dh55.09 billion) of investment in Turkey that will be channeled into Turkish financial markets and banks, a government source told Reuters yesterday. The investment package