On June 5th, the Ministry of Finance of the UAE announced Cabinet Decision No. 56 of 2023 “On the Taxation of Non-Residents in the UAE” regarding the corporate tax law.
According to the decision, foreign non-resident companies will be subject to corporate tax on income derived from real estate and other immovable property located in the UAE. Additionally, such companies will be required to register in the UAE as corporate tax payers. These requirements apply to both commercial and investment properties.
Non-resident legal entities that own property in the UAE will be subject to corporate tax based on “net income,” which is calculated after deducting relevant expenses.
Income from real estate investments derived from immovable property in the UAE, owned directly or through a trust, fund, or other structure that is considered fiscally transparent for the purposes of UAE corporate tax, is generally not subject to corporate tax. However, this applies only if it is not a licensed entrepreneurial activity.
Furthermore, real estate investment trusts and other qualified investment funds may qualify for an exemption from corporate tax on income derived from investments in real estate in the UAE, subject to compliance with relevant conditions.
