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May 15, 2026

This Public Clarification clarifies the VAT implications of Dubai Law No. 6 of 2019 for Owners' Associations and Management Entities. Following this law, all rights and obligations of Owners' Associations were transferred to Management Entities, meaning Associations no longer make taxable supplies and were required to apply for VAT deregistration. This clarification outlines this mandatory deregistration process under Article 21 of the VAT Decree-Law. It further establishes that Management Entities are now considered the suppliers of services to property owners, making them liable for VAT on service charges and responsible for issuing tax invoices and recovering input tax.

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VAT Public Clarification

Dubai Owners' Associations and Management Entities

Issue

Law No. 6 of 2019 Concerning Ownership of Jointly Owned Real Property in the Emirate of Dubai ("Law No. 6") was issued on 4 September 2019 and has a significant impact on Dubai Owners' Associations and Management Entities.

As a result of Law No. 6, Dubai Owners' Associations no longer make taxable supplies and are, therefore, required to deregister for VAT. There are, however, numerous Dubai Owners' Associations that are still registered for VAT.

This Public Clarification clarifies the VAT implications of Law No. 6 on Dubai Owners' Associations and Management Entities.

Summary

On 3 November 2019, all rights and obligations of Dubai Owners' Associations were transferred to Management Entities, which resulted in Dubai Owners' Associations no longer making taxable supplies.

Dubai Owners' Associations were, therefore, required to apply for VAT deregistration within the period prescribed in the tax legislation of 20 business days; that is, no later than 4 December 2019.

Management Entities are regarded as making supplies to the owners of Jointly Owned Real Property and required to fulfill VAT obligations in this regard, including the issuing of valid tax invoices and VAT reporting.

Detailed discussion

In this clarification, Federal Decree-Law No. 8 of 2017 on Value Added Tax is referred to as "Decree- Law", Cabinet Decision No. 52 of 2017 on the Executive Regulation of the Federal Decree-Law No. 8 of 2017 on Value Added Tax and its amendments is referred to as "Executive Regulation", Federal Law No. 7 of 2017 on Tax Procedures Tax is referred to as "Tax Procedures Law", and Cabinet Resolution No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE is referred to as "Cabinet Resolution 40".

Law No. 6

Law No. 6 was published on 4 September 2019 and became effective 60 days thereafter; that is, on 3 November 2019. This Law applies to all Master Projects and Jointly Owned Real Property in Dubai, including those in Special Development Zones and in free zones.

Article 2 of Law No. 6 defines the term "Jointly Owned Real Property" as a building, including the parts and appurtenances allocated for common use, and the land on which that building is constructed; or land which is subdivided into units or land plots intended for individual ownership.