FTA Issues Clarification on Corporate Tax Exemptions of Investors in REITs as a Qualified Fund

The Federal Tax Authority (FTA) has issued a public clarification regarding the corporate tax treatment of investors in Real Estate Investment Trusts (REITs) that are recognized as Qualified Funds under UAE tax law.

This move aims to enhance taxpayer awareness and clarify the compliance obligations for both REITs and their investors, particularly those who are eligible for corporate tax exemptions.

According to the FTA, for tax periods beginning on or after January 1, 2025, both resident and non-resident juridical persons investing in exempt REITs will be taxed on 80% of the immovable property income on a pro-rata basis.

However, if a REIT distributes its income within nine months of the financial year-end and an investor has already disposed of their entire interest in the REIT, such an investor will not be taxed on the immovable property income received.

Read our full guide for more information on Qualified REITs and tax exemptions.