Amending the conditions for excluding corporate real estate from the real estate transaction tax

The Zakat, Tax and Customs Authority has updated the conditions for excluding corporate real estate from the scope of application of the real estate transaction tax.

Conditions for excluding corporate real estate from the scope of application of the real estate transaction tax

The Authority stated that the disposal of real estate by any person to a company is excluded from the scope of the real estate disposal tax, provided that that real estate is registered in the company’s assets before the effective date of the regulation.

  That person must be a partner in that company on the date the property is included in its assets, and the disposer must submit audited financial statements or certificates approved by a licensed public accountant proving that the property is included in the company’s assets before the effective date of the regulation until the date of disposal.

The scope of the exception includes a real estate transaction that provides an in-kind contribution to the capital of a real estate investment fund, in accordance with the rules and regulations of the Capital Market Authority, provided that the fund’s units or the shares corresponding to the real estate transaction are not disposed of until the date of the fund’s termination or liquidation, or for a period of 5 years from the date of registration or ownership of the units.

Real estate transaction

The scope of the exception includes a real estate transaction that provides an in-kind contribution to the capital of a real estate investment fund, in accordance with the rules and regulations of the Capital Market Authority, provided that the fund’s units or the shares corresponding to the real estate transaction are not disposed of until the date of the fund’s termination or liquidation, or for a period of 5 years from the date of registration or ownership of the units. Or shares, whichever comes first.

New creation

  In the same regulations, the Authority introduced a new paragraph in Article Three, which stipulates that it is not considered a breach of the condition of not disposing of the shares or shares corresponding to the excluded real estate disposal, the change in the percentage of ownership through offering or re-offering the shares of the disposed company or the disposed fund in accordance with the rules and regulations of the Market Authority. Finance.