Is income from real estate investment trusts taxed?

Article 4 – Conditions to Exempt a Real Estate Investment Trust from Corporate Tax 1. A Real Estate Investment Trust shall meet all of the following conditions, in addition to the conditions under Clause (1) of Article (10) of the Corporate Tax Law, in order to apply to the Authority to be exempt from Corporate Tax as a Qualifying Investment Fund: a. The value of Immovable Property, excluding land, under the management or ownership of the Real Estate Investment Trust and any Exempt Person specified under paragraphs (f), (h) and (i) of Clause (1) of Article (4) of the Corporate Tax Law wholly directly or indirectly owned and controlled by the Real Estate Investment Trust exceeds AED 100,000,000 (one hundred million United Arab Emirates dirhams). b. Where any of the following is met: 1) At least 20% (twenty percent), or any other percentage as specified by the Minister, of its shares are floated on a Recognised Stock Exchange and the Real Estate Investment Trust and its Related Parties or Connected Persons do not subscribe to or purchase any of the floated shares. 2) It is directly wholly owned by (2) two or more institutional investors specified in Clause (8) of this Article, provided that at least (2) two of those Cabinet Decision No. 34 of 2025 – As published by the Ministry of Finance 7 institutional investors are not Related Parties. c. The Real Estate Investment Trust, including any Exempt Person specified under paragraphs (f), (h) and (i) of Clause (1) of Article (4) of the Corporate Tax Law wholly directly or indirectly owned and controlled by the Real Estate Investment Trust, must have an average value of rental income-generating Immovable Property, excluding Immovable Property held solely for capital appreciation, of at least 70% (seventy percent) of the total value of its assets during the relevant Financial Year. d. To provide its investors with all information, documents and data necessary for the purposes of calculating their Taxable Income adjusted pursuant to this Decision. 2. Clauses (1), (8), (10) and (11) of Article (3) of this Decision shall apply to a Real Estate Investment Trust that is exempt from Corporate Tax as a Qualifying Investment Fund. 3. Without prejudice to Clause (1) of Article (3) of this Decision, the Taxable Income of a juridical person that is an investor in a Real Estate Investment Trust that is exempt from Corporate Tax as a Qualifying Investment Fund, for the relevant Tax Period shall be adjusted to include 80% (eighty percent) of the prorated Immovable Property Income. Such investor may adjust its Taxable Income to include depreciation adjustments in accordance with Clause (8) of Article (3) of this Decision. 4. As an exception to Clause (3) of this Article, if the Real Estate Investment Trust distributes 80% (eighty percent) or more of its Immovable Property Income to the investors in relation to the relevant Financial Year within (9) nine months from the end of that Financial Year, the income of the investor, who did not receive this distribution due to the disposal of its Ownership Interest in the Real Estate Investment Trust, shall not be adjusted proportionate to that disposal. 5. If the investor disposes of its Ownership Interest in a Real Estate Investment Trust and Article (23) of the Corporate Tax Law does not apply to such disposal, the investor’s Taxable Income in the Tax Period in which the disposal took place shall be adjusted to exclude undistributed income that was included in its Taxable Income in relation to that interest in accordance with Clause (3) of this Article in that Tax Period and any previous Tax Periods, subject to not exceeding the taxable Cabinet Decision No. 34 of 2025 – As published by the Ministry of Finance 8 gain arising from such disposal. 6. The Taxable Income of the investor shall be increased by the depreciation amount previously deducted under Clause (3) of this Article in the Tax Period in which any of the following occur, whichever is earlier: a. Disposal of the Immovable Property by the Real Estate Investment Trust. b. Disposal of the Ownership Interests in the Real Estate Investment Trust by the investor. 7. Paragraphs (a) and (b) of Clause (2) of Article (2) of this Decision shall apply to a Real Estate Investment Trust that is exempt from Corporate Tax as a Qualifying Investment Fund, and reference to resident investment fund in that Clause shall be replaced with reference to Real Estate Investment Trust. 8. An institutional investor is any of the following: a. A Government Entity. b. A Government Controlled Entity. c. Any juridical person wholly owned and controlled by any entity specified under paragraph (a) and (b) of this Clause. d. A foreign government, its institutions and authorities or the juridical persons wholly owned and controlled by any of them. e. International organisation. f. A Bank. g. An Insurance Provider. h. A pension or social security fund. i. An investment fund licensed and regulated by a relevant competent authority or a similar regulatory authority in or outside of the State. j. Any other juridical person determined by the Authority. Cabinet Decision No. 34 of 2025 – As published by the Ministry of Finance 9

Article 26 – Transfers Within a Qualifying Group 1. No gain or loss needs to be taken into account in determining the Taxable Income in relation to the transfer of one or more assets or liabilities between two Taxable Persons that are members of the same Qualifying Group. 2. Two Taxable Persons shall be treated as members of the same Qualifying Group where all of the following conditions are met: a. The Taxable Persons are juridical persons that are Resident Persons, or NonResident Persons that have a Permanent Establishment in the State. b. Either Taxable Person has a direct or indirect ownership interest of at least 75% (seventy-five percent) in the other Taxable Person, or a third Person has a direct or indirect ownership interest of at least 75% (seventy-five percent) in each of the Taxable Persons. c. None of the Persons are an Exempt Person. d. None of the Persons are a Qualifying Free Zone Person. e. The Financial Year of each of the Taxable Persons ends on the same date. f. Both Taxable Persons prepare their financial statements using the same accounting standards. 3. For the purposes of this Decree-Law, where a Taxable Person applies Clause 1 of this Article: a. the asset or liability shall be treated as being transferred at its net book value at the time of transfer so that neither a gain nor a loss arises; and Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 33 b. the value of any consideration paid or received against the transfer of the asset or liability shall equal the net book value of the transferred asset or liability. 4. The provision of Clause 1 of this Article shall not apply where, within (2) two years from the date of the transfer, any of the following occurs: a. There is a subsequent transfer of the asset or liability outside of the Qualifying Group. b. The Taxable Persons cease to be members of the same Qualifying Group. 5. Where Clause 4 of this Article applies, the transfer of the asset or liability shall be treated as having taken place at Market Value at the date of the transfer for the purposes of determining the Taxable Income of both Taxable Persons for the relevant Tax Period.