Latest news with #CorporateTax
Gulf Business
4 days ago
- Business
- Gulf Business
UAE issues new decision on depreciation rules for investment properties under corporate tax law
Image: WAM The UAE Read- It specifies the conditions under which depreciation will be calculated and the method for making tax adjustments, in line with the Federal Decree-Law No 47 of 2022 on the Taxation of Corporations and Businesses. Investment properties: The move is part of ongoing efforts to implement the UAE's corporate tax regime The ministry said the decision aims to ensure consistency in how taxable income is calculated for corporate tax purposes, especially in sectors where investment properties are a significant part of the balance sheet. The move is part of ongoing efforts to implement the UAE's Further guidance is expected to be released to support companies in aligning their tax reporting with the new requirements. Abu Dhabi-based property developer Aldar welcomed the update, with group chief financial and sustainability officer Faisal Falaknaz calling it a 'progressive and well-calibrated step' that promotes fairness, supports long-term capital planning, and boosts investor confidence. It's a technical change, but one that could have a big impact on how real estate firms approach tax compliance and valuation strategies in the UAE. ' Aldar expresses its gratitude for the UAE Ministry of Finance for this progressive and well-calibrated step, which reflects a deep commitment to fairness, clarity, and international best practices in the implementation of the Corporate Tax Law,' Falaknaz said. In recent news the Ministry of Finance and the Federal Tax Authority also amended the excise tax on sugar-sweetened beverages, replacing the flat rate with a tiered volumetric model that ties the tax per litre to the sugar content per 100ml. The higher the sugar content, the higher the tax, an approach aimed at promoting public health, curbing consumption of high-sugar drinks, and pushing manufacturers to reduce sugar levels in their products.
Zawya
4 days ago
- Business
- Zawya
Aldar welcomes new UAE tax depreciation decision as positive step for the real estate sector
Aldar has welcomed the UAE Ministry of Finance's new Ministerial Decision on Depreciation Adjustments for Investment Properties held at Fair Value, under Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses. The decision allows taxpayers, who elect the realization basis, to deduct tax depreciation from their taxable income for investment properties held at fair value. The tax depreciation amount will be the lower of the tax written down value or 4% of the original cost of the property for each 12-month tax period or prorated for shorter periods. This treatment ensures tax neutrality and equity with deductions available to businesses that hold investment properties on a historical cost basis. The decision also provides clarity on how tax depreciation applies in cases of property transfers (between related or third parties), developments, and claw-back scenarios—ensuring businesses have a clear view of their compliance obligations and financial planning. Faisal Falaknaz, Group Chief Financial and Sustainability Officer at Aldar, said: 'Aldar expresses its gratitude for the UAE Ministry of Finance for this progressive and well-calibrated step, which reflects a deep commitment to fairness, clarity, and international best practices in the implementation of the Corporate Tax Law. By enabling depreciation deductions for investment properties held at fair value, this decision creates parity between different accounting treatments, helping companies plan long-term capital deployment more effectively. It will also reinforce investor confidence, attract institutional capital, and enhance the UAE's standing as a transparent, competitive, and globally integrated investment destination—particularly for the real estate sector.' Aldar operates two core business divisions: Aldar Development and Aldar Investment. Aldar Investment holds a substantial portfolio of income-generating properties across key asset classes, including commercial, retail, residential, and logistics. As of 31 December 2024, the portfolio had a gross asset value of AED 25.8 billion and delivered EBITDA of AED 2.5 billion in 2024. About Aldar Aldar is the leading real estate developer, manager, and investor in Abu Dhabi, with a growing presence across the United Arab Emirates, the Middle East North Africa, and Europe. The company has two core business segments, Aldar Development and Aldar Investment. Aldar Development is a master developer of a 62 million sqm strategic landbank, creating integrated and thriving communities across Abu Dhabi, Dubai, and Ras Al Khaimah's most desirable destinations. The delivery of Aldar's developments is managed by Aldar Projects, which is also a key partner of the Abu Dhabi government in delivering housing and infrastructure projects across the UAE's capital. Internationally, Aldar Development wholly owns UK real estate developer London Square, as well as a majority stake in leading Egyptian real estate development company, SODIC. Aldar Investment houses a core asset management business comprising a portfolio of more than AED 46 billion worth of investment grade and income-generating real estate assets diversified across retail, residential, commercial, logistics, and hospitality segments. It manages four core platforms: Aldar Investment Properties, Aldar Hospitality, Aldar Education, and Aldar Estates.
Zawya
5 days ago
- Business
- Zawya
UAE: Ministry of Finance issues Ministerial Decision on Depreciation Adjustments for Investment Properties held at Fair Value
The UAE Ministry of Finance has issued a new Ministerial Decision regarding Depreciation Adjustments for Investment Properties held at Fair Value for the Purposes of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses. Under this decision, taxpayers (who elect for the realisation basis) can elect to deduct depreciation from their taxable income (hereafter known as 'tax depreciation') for investment properties that are held on a fair value basis. The tax depreciation deduction available will be the lower of the tax written down value of the investment property or 4 percent of the original cost of the investment property, for each 12-month tax period or otherwise prorated for part of the tax period, during which the relevant investment property is held, and will be available to taxpayers who hold investment properties prior to and/or after the introduction of corporate tax. The decision provides clarity as to the value upon which tax depreciation can be claimed depending on whether the investment property is transferred between related parties or third parties or has been constructed/developed by the taxpayer. The decision provides parity between taxpayers who hold investment properties on a historical cost basis, who can already benefit from a deduction for accounting depreciation, with those who hold investment properties on a fair value basis. To avail this benefit, this decision therefore requires taxpayers to make this irrevocable election in their first Tax Period beginning on or after 1 January 2025 in which they hold an investment property and such election will apply to all investment properties going forward. Given the realisation basis must have been elected for by taxpayers wanting to benefit from the tax depreciation election, and that the realisation basis election is generally made in the first Tax Period, the decision also allows for an exceptional window for taxpayers to opt in to elect for the realisation basis to avail the tax depreciation deduction. Finally, the decision provides guidance on when the claw-back of tax depreciation may occur in instances outside of a disposal of an investment property such that taxpayers are aware of their tax compliance obligations and are able to accurately assess their returns on investment property. The release of this decision reflects the Ministry's commitment in ensuring a level playing field for all taxpayers, thus enhancing the principles of tax neutrality and equity in the UAE Corporate Tax regime and ensuring such deductions are aligned with international best practice.
Zawya
5 days ago
- Business
- Zawya
MoF issues Ministerial Decision on Depreciation Adjustments for Investment Properties held at Fair Value for the purposes of Corporate Tax Law
Abu Dhabi, United Arab Emirates: The UAE Ministry of Finance has issued a new Ministerial Decision regarding Depreciation Adjustments for Investment Properties held at Fair Value for the Purposes of Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses. Under this decision, taxpayers (who elect for the realization basis) can elect to deduct depreciation from their taxable income (hereafter known as 'tax depreciation') for investment properties that are held on a fair value basis. The tax depreciation deduction available will be the lower of the tax written down value of the investment property or 4% of the original cost of the investment property , for each 12-month tax period or otherwise prorated for part of the tax period, during which the relevant investment property is held, and will be available to taxpayers who hold investment properties prior to and/or after the introduction of corporate tax. The decision provides clarity as to the value upon which tax depreciation can be claimed depending on whether the investment property is transferred between related parties or third parties or has been constructed/developed by the taxpayer. The decision provides parity between taxpayers who hold investment properties on a historical cost basis, who can already benefit from a deduction for accounting depreciation, with those who hold investment properties on a fair value basis. To avail this benefit, this decision therefore requires taxpayers to make this irrevocable election in their first Tax Period beginning on or after 1 January 2025 in which they hold an investment property and such election will apply to all investment properties going forward. Given the realization basis must have been elected for by taxpayers wanting to benefit from the tax depreciation election, and that the realization basis election is generally made in the first Tax Period, the decision also allows for an exceptional window for taxpayers to opt in to elect for the realization basis to avail the tax depreciation deduction. Finally, the decision provides guidance on when the claw-back of tax depreciation may occur in instances outside of a disposal of an investment property such that taxpayers are aware of their tax compliance obligations and are able to accurately assess their returns on investment property. The release of this decision reflects the Ministry's commitment in ensuring a level playing field for all taxpayers, thus enhancing the principles of tax neutrality and equity in the UAE Corporate Tax regime and ensuring such deductions are aligned with international best practice.
Zawya
6 days ago
- Business
- Zawya
UAE: FTA emphasises prompt corporate tax registration to benefit from penalty waiver
The Federal Tax Authority (FTA) confirmed an increase in the number of beneficiaries from the Corporate Tax Late Registration Penalty Waiver initiative applicable to Taxable Persons and certain categories of Exempt Persons required to register with the FTA who were late in submitting their Corporate Tax registration applications within the deadline. The FTA clarified that in order to be exempt from the AED10,000 'Late Registration Penalty' for Corporate Tax, Taxable Persons (or Exempt Persons required to register) must submit their Tax Return (or annual declaration) no later than seven months from the end of their first Tax Period (or the first Financial Year), instead of nine months. The Late Registration Penalty Waiver initiative applies only to the first Tax Period of the Taxable Person (or Exempt Person required to register), regardless of whether the due date of the first Tax Return (or annual declaration) was before or after the new decision came into effect. Khalid Ali Al Bustani, Director General of the FTA, emphasised the importance of the non-registered Corporate Tax Taxable Persons to submit their Corporate Tax registration applications to the FTA, followed by the submission of Tax Returns through the 'EmaraTax' platform. He highlighted that meeting the deadlines allows eligible Taxable Persons and certain Exempt Persons—who are required to register—to benefit from the UAE Cabinet Decision on the administrative penalties waiver initiative, which exempts them from fines related to delays in Corporate Tax registration. Al Bustani added, 'This important initiative comes as part of the comprehensive strategy to support business sectors and encourage voluntary compliance with tax laws and procedures to avoid Administrative Penalties. This contributes to promoting economic growth, ensuring tax transparency and fairness within a legislative environment that keeps pace with developments through sustainable improvement, while maintaining performance quality and managing the tax system with the highest levels of efficiency and accuracy.' He stated, 'It is clear that the initiative to waive the Late Registration Penalty is incentivising many registrants for Corporate Tax as we note an increase in the number of Corporate Tax registrations to 576,000 – up from 538,000 registrants before the launch of the waiver initiative, in April 2025. This resulted in an increase of 38,000 additional registrations, as thousands of Corporate Tax registrants have submitted their Tax Return and annual declaration within the specified deadline to benefit from the Late Registration Waiver.' Al Bustani said that these indicators are a clear reflection of the initiative's success, which shows how the awareness on tax compliance and procedures is growing across all business sectors, in the UAE. The FTA is keen to continue engaging with the business community through various awareness channels, as well as to seek taxpayers' views and discuss ways to overcome any challenges they may face. Furthermore, the authority is intensifying its efforts, in cooperation with the relevant entities, to raise awareness about the importance of the initiative and the need for non-registered Corporate Tax Taxable Persons to benefit from the waiver initiative.
