Issue
The Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Business, and its amendments (“Corporate Tax Law”) applies to Tax Periods commencing on or after 1 June 2023.
A Real Estate Investment Trust ("REIT") that meets all of the conditions of Article 10(1) of the Corporate Tax Lawand Article 4(1) of Cabinet Decision No. 34 of 2025 on Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses ("Cabinet Decision No. 34 of 2025")can make an application to the FTA to be exempt from Corporate Tax as a Qualifying Investment Fund, effective from the beginning of the Tax Period specified in the application or any other date determined by the FTA.
For clarity, this clarification refers to a REIT that is, or will be, exempt from Corporate Tax as a Qualifying Investment Fund.
For Tax Periods commencing on or after 1 January 2025, where a REIT is exempt from Corporate Tax, Resident and Non-Resident juridical persons that are investors in the REIT are subject to Corporate Tax on 80% of the prorated Immovable Property Income of the REIT.However, if the REIT makes a distribution within 9 months from the end of its Financial Year and the investor did not receive the dividend distribution due to disposal of its entire Ownership Interest in the REIT, the investor will not be subject to Corporate Tax on the Immovable Property Income of the REIT (as explained below).