FTA Issues Clarification on Corporate Tax Rules for REIT Investors

UAE, 7 May, 2025 : The Federal Tax Authority (FTA) has released a public clarification outlining the corporate tax implications for investors in Real Estate Investment Trusts (REITs) that are exempt as Qualified Funds under UAE Corporate Tax Law.

Effective for tax periods starting on or after 1 January 2025, both resident and non-resident legal persons investing in exempt REITs will be subject to corporate tax on 80% of the REIT’s UAE-based immovable property income, unless specific conditions are met. If the REIT distributes its income within nine months of its financial year-end and the investor has exited their investment before receiving dividends, the income may not be taxable for that investor.

The clarification details tax treatment on profit distributions, investment-related expenses, asset disposals, and fee adjustments. It also highlights compliance obligations, such as providing income details and appointing tax agents for non-resident investors.

The FTA's guidance aims to enhance transparency and help investors and REITs meet their tax obligations under the new corporate tax regime.