UAE Law and Practice Contributed by: Duncan Pickering, Nicola de Sylva, Sean Cope and Marta Almeida, DLA Piper LLP
culated at 5% of the rent (with a minimum of AED450), which is paid to the Abu Dhabi Distribution Company or Al Ain Distribution Company on behalf of the DMT, in addition to water and electricity bills. Registration for the fees occurs automatically when the lease is registered with Tawtheeq. In Dubai, a municipality fee applies on the occupa - tion of property, calculated as 5% of the annual rent or 0.05% of the value of the property (in the case of ownership). Value is generally treated as the amount for which the current occupier bought the property. 8.4 Income Tax Withholding for Foreign Investors Income earned from immovable property in the UAE by foreign individual investors, who are considered UAE taxpayers based on the criteria provided in 2.10 Taxes Applicable to a Transaction , is currently not subject to any withholding tax in the UAE, as the rate is set at 0%. It is important to note that this rate might change in the future.
Foreign legal entities that derive income from immov - able property in the UAE will be considered to have a nexus in the UAE. Non-resident persons that have a nexus in the UAE are required to register for CIT purposes. 8.5 Tax Benefits There are no specific rules under the UAE CIT regime regarding depreciation deductions for real estate. In the absence of specific rules governing the deprecia - tion of real estate assets, for tax purposes deprecia - tion rules will default to the guidelines set out under applicable accounting standards (ie, the International Financial Reporting Standards).
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