VAT on Commercial Properties in the UAE
The implementation of VAT has been one of the turning points for the UAE market. It is quite well known that the Value Added Tax, commonly known as consumption tax, is an indirect tax which gets applied on the goods and services consumed. Although the concept of VAT in UAE has been adopted to fetch new revenue source for the country, still it has raised different types of queries in the minds of investors, entrepreneurs, as well as local people involved in the business domain. However, a confusion that still prevails is that ‘Is VAT applicable on Commercial Properties?’ The query stands as a valid one because commercial properties play an important part in business world. If you hold the same query, then do read this article.
VAT & Commercial Properties in the UAE
The concept of VAT was implemented on 1st Jan 2018, at 5% to fetch in more revenue for the economy. This compelled each party involved in the goods and services business to pay tax. The commercial properties have got a large market when it comes to the UAE. Real estate stands as one of the top business sectors. Now, according to the reports published, the commercial properties of the holders in the UAE are not exempted from tax. This means that no matter whether the property you hold has been purchased, or has been taken under lease, the tenants, purchasers need to bear tax. This mandates for each person involved in this domain to pay a VAT at 5%.
Issuance of Tax Invoice
While carrying out the process of implementing VAT for commercial properties, a tax invoice needs to be issued by the seller to the purchaser, while selling the property.
