TaxSavvyAE

Selling a commercial property

I am selling a shop I own. Is VAT due on the sale?

The situation

Sales of commercial property are standard rated at 5 percent. If you are registered or the sale pushes you over the threshold, you charge VAT.

The law

  • Art 3, Federal Decree-Law 8 of 2017: Standard rate on commercial property
  • Art 13, Federal Decree-Law 8 of 2017: Mandatory registration above AED 375,000 in 12 months or expected within 30 days

What it means for you

A single sale of AED 2 million by an individual can trigger registration because it passes AED 375,000. Example: register before completion, charge AED 100,000 VAT and issue a tax invoice. Agree in the contract that the price excludes VAT, or the VAT comes out of your proceeds.

What to do

  1. Check whether the sale triggers registration.
  2. Register before completion if needed.
  3. State in the contract that price excludes VAT.
  4. Issue a tax invoice and file the return.

We can do this for youVAT on real estate: residential and commercial sales and leases, first supply zero rating, bare land and landlord registration: AED 1,500

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