VAT and Real Estate in Dubai
All of the countries in the GCC last year agreed to introduce VAT on a number of goods and services as a means to diversify their sources of revenues. The UAE said it will introduce VAT starting next January and the country’s president¸ Sheikh Khalifa bin Zayed Al Nahyan, last month ratified a law approving the introduction of the new tax.
Real estate companies in the United Arab Emirates should consider lowering costs and business expectations to minimise the impact of the new 5 percent value-added tax (VAT), a top official at Dubai-based retail group Landmark, has said.
Under a recently-released UAE VAT law, only newly-built residential properties will benefit from a zero rate for VAT for the first three years after they have been completed. This will allow developers to claim back VAT paid on construction costs.Residential real estate, on the other hand, will be exempt from VAT, which, unlike the zero rating, does not allow owners to reclaim VAT paid on business costs.
Landmark Group CEO says, real estate firms should cut costs to reduce impact of VAT. Link
Real estate companies in the United Arab Emirates should consider lowering costs and business expectations to minimise the impact of the new 5 percent value-added tax (VAT), a top official at Dubai-based retail group Landmark, has said.
Under a recently-released UAE VAT law, only newly-built residential properties will benefit from a zero rate for VAT for the first three years after they have been completed. This will allow developers to claim back VAT paid on construction costs.Residential real estate, on the other hand, will be exempt from VAT, which, unlike the zero rating, does not allow owners to reclaim VAT paid on business costs.
Landmark Group CEO says, real estate firms should cut costs to reduce impact of VAT. Link
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