The UAE Tax Case Study. Real Estate Tax Exemption: License vs. Permit in the UAE

On 24 October 2024, the Federal Tax Authority (FTA) released essential guidance on Corporate Tax for real estate investments by individuals, addressing a complex area where real estate activities diverge from standard Corporate Tax rules and highlighting critical questions on licensing.

A key focus in the attached study is the FTA's classification of a Dubai holiday home permit as a “license” for Corporate Tax purposes, along with insights on whether this interpretation aligns with broader UAE regulatory definitions. The licensing issue is crucial, as the need for a license is central to determining tax obligations for real property investors.

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Author: Andrey Nikonov