However, this exemption does not apply if the property is associated with a licensed business activity. Additionally, Real Estate Investment Trusts (REITs) and other Qualifying Investment Funds can also benefit from an exemption on income derived from investments in UAE immovable property, provided they meet the necessary conditions.
Implications for Real Estate and Investment:
The introduction of corporate tax on non-resident entities’ income from UAE immovable property underscores the UAE’s commitment to creating a fair and transparent tax system. This move aims to encourage investment in the real estate sector and promote sustainable economic growth.
While the new tax regime may impact non-resident entities, it is important to note that exemptions and specific conditions exist to support certain types of investments, such as REITs and Qualifying Investment Funds.
The UAE’s Ministry of Finance has implemented a cabinet decision regarding corporate tax on non-resident entities’ income from UAE immovable property. This step aligns with international best practices and reinforces the principle that income from immovable property should be taxable in the country where the property is situated.
While the introduction of corporate tax may have implications for non-resident entities, exemptions and conditions have been put in place to accommodate various investment structures. These measures aim to strengthen the UAE’s fiscal framework, attract foreign investment, and contribute to long-term economic growth.
Read the FAQ on Corporate Tax: UAE Corporate Tax: Frequently Asked Questions
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