Applicability Of VAT On Commercial Property And Real Estate In UAE

VAT REGISTRATION UAE

VAT On Commercial Property And Rea l Esta te In UAE

VAT REGISTRATION UAE

Step 1: Assess W hich Comm ercia l or Real Estate Properties Are Taxable

Commercial properties in the UAE, whether leased out or sold, are taxable unless provided they are for residential use.

Any Non-Resident property owners and/or tenants cannot escape 5 % VAT for commercial property. If the landlord and tenant are both non-residents, the landlord has to register for VAT if the property is in the UAE. Lease incentives, such as free office fit-outs, could be subject to VAT.

VAT will also be applicable to rents payable under commercial rental contracts. Any property, which is not fixed to the ground and hence movable, would also be considered commercial for VAT purposes. Mobile homes, for example.

VAT REGISTRATION UAE

Step 2: Determ ine Your Eligibility to Register for Comm ercia l Properties

If the value of taxable supplies exceeds AED 375,000, a business can undergo mandatory VAT registration.

If taxable supplies exceed AED 187500 to AED 375000, then the company can undergo voluntary VAT registration.

VAT REGISTRATION UAE

Step 3: Submit Details to

Experts Details of the applicant

Tax

Supply the details of the person who is operating the real estate business. whether he is an individual or a business, details of the applicant must be submitted to the tax experts.

Supply Details regarding the VAT amount

The applicable VAT amount on the sale of the property should be declared (mentioned in the tax invoice provided by the seller.)

Seller’s TRN

The Tax Registration Number of the seller should be furnished to the tax expert as mentioned in the tax invoice.

Details of Property number

The official property number as provided by the seller or the land registration department should be furnished.

Date of purchase

This is the purchase date of the commercial property as mentioned on the tax invoice.