Application of the valuation method under the transitional rules as set out in Ministerial Decision No. 120 of 2023 on disposal of Qualifying Immovable Property by a real estate developer that is a Taxable Person
This Public Clarification (CTP009) clarifies the application of the valuation method under the transitional rules as stated in Article 2(2)(a) of Ministerial Decision No. 120 of 2023 to real estate developers that are Taxable Persons making off-plan sales and recognising the revenue from those sales over the period of construction in line with IFRS 15, or equivalent standard under IFRS for SMEs, in respect of projects under construction (and not yet completed before the start of the first Tax Period), in the situations specified below:
- Where land was owned before the first Tax Period and the construction commenced after the start of the first Tax Period.
- Where the project is work in progress at the start of the first Tax Period and the construction commenced before the first Tax Period.
View the Document: Corporate Tax Public Clarification | CTP009
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Important Notice
The above extract has been provided for reference only and is based on information available in the public domain at the time of publication, which is subject to change. This does not constitute any form of advice or recommendation and therefore cannot be relied on to cover specific situations. We highly recommend that you consult with a qualified tax advisor in the UAE for personalized guidance based on your specific business circumstances. We accept no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Please refer to the following resources for the official and up-to-date information on the UAE Corporate Tax legal framework:- UAE Ministry of Finance: https://mof.gov.ae/tax-legislation/; and
- UAE Federal Tax Authority: https://tax.gov.ae/en/Legislation.aspx