Taxes allow taxpayers to request a prior opinion on real estate profits tax… Details

Agadir 24 | Agadir24/UAE

The General Directorate of Taxes announced today, Monday, May 6, 2024, that it has become possible for taxpayers who wish to transfer real estate property or real rights related to it to request a prior opinion from the Directorate regarding income tax based on real estate profits.

The Directorate explained, in a statement, that the new system for income tax based on real estate profits, updated under the Finance Law of 2023, “allows obligated persons who wish to initiate the transfer of real estate property or real rights related to it, to request from the General Directorate of Taxes an advance opinion regarding the elements.” Determining the net real estate profit subject to tax and the corresponding tax amount, or, when necessary, the right to benefit from exemption from this tax.

The same source indicated that this application must be submitted electronically according to a form prepared by the administration within the thirty days following the date of completion of the promise to sell, accompanied by the proof papers related to determining the tax or exemption, reminding that this system applies to the transfer of real estate properties or real rights related to them, Completed starting July 1, 2023.

He added that the administration informs the applicant of its opinion, which is considered a certificate of tax liquidation or exemption from the tax, electronically, within the sixty days following the date of receipt of the aforementioned application. This certificate remains valid for a period of six months, starting from the date of receiving the administration’s response.

After completing the transfer process, the obligee must submit the declaration related to this process electronically within thirty days following the date of transfer, and if necessary, pay the tax due at the same time. In this regard, two cases can be considered. The first case: If the obligee files the declaration related to real estate profits and proceeds, if necessary, to pay the tax amount on the basis of the elements of the tax liquidation certificate, he will be exempted from tax control with regard to the income tax on real estate profits.

As for the second case: Persons who have not filed the declaration based on the elements of the liquidation certificate, as well as persons who have not requested the prior opinion of the tax administration, must pay, temporarily, to the tax administration clerk the difference between the declared tax amount and the amount of 5 percent of the transfer price. . This declaration may be the subject of the correction procedure stipulated for real estate profits.

The concerned taxpayer automatically recovers the remainder of the amount paid temporarily, which is the difference between the declared tax amount and the amount of 5 percent of the transfer price following deducting the additional tax amount that was issued immediately following the correction procedure. The amount paid will also be automatically refunded temporarily if the administration does not initiate the correction procedure within the specified period.