REITs (Real Estate Investment Trusts) are popular because they allow people to invest in real estate without directly owning property. But without clear tax guidance, even these structured investment tools become complicated.
To fix this, the Ministry of Finance issued Ministerial Decision No. [96] of 2025. This new decision clears the air by setting conditions under which certain REITs can enjoy corporate tax exemptions. The move brings relief to investors and fund managers alike.
Get a deeper understanding of the matter with the help of our corporate tax consultants UAE at Tax Gian.
Understanding Decision No. 96 of 2025
This Ministerial Decision works alongside Federal Decree-Law No. 47 of 2022 and Cabinet Decision No. 34 of 2025. It has introduced key requirements for REITs to seek exemption from the corporate tax law.
Below are the key areas that are covered by this law. Let’s see what they are!
- Reduced Listing Requirement for New REITs
A major highlight of the new decision is the reduced minimum listing requirement. From May 1 to May 31, 2025, a REIT that lists its shares for the first time only needs to float 10% of its shares on a recognised stock exchange.
This is a temporary change from the earlier rule, which required a higher percentage. It aims to encourage more REITs to go public during this specific period, giving them a path to qualify for tax exemption.
- Start Date for Tax Application
The conditions set in Ministerial Decision No. 96 will apply to tax periods starting on or after January 1, 2025. This gives REITs and investors time to prepare their documentation, adjust strategies, and align with the new rules. Corporate tax consultants Dubai can help in this.
- Who Can Benefit from the Exemption?
The exemption is not limited to UAE-based companies. Both resident and non-resident investors (juridical persons) who invest in qualified REITs may benefit.
This makes the UAE an attractive destination for international investors looking for tax-efficient real estate options.
- Income Considered for Taxation
- Income from the rent or lease of UAE real estate
- Profits from property sales or disposals
- Gains from transfers of rights
- Other income from direct use or management of real property
- Taxable Share of Income
Even though REITs may be exempt, investors are not always fully exempt. Investors will be taxed on 80% of the immovable property income, but only in proportion to their share.
However, if the REIT distributes the income on time, and an investor has fully exited before distribution, they won’t be taxed on that income. Timing and ownership are both important.
- The 9-Month Rule for Income Distribution
One of the most important conditions for tax exemption is timely income distribution. The REIT must distribute income within nine months after the financial year ends.
Failing to meet this timeline means the income becomes taxable to investors who still hold their shares. Get fresh insights from corporate tax consultants Dubai.
- When an Investor Is Fully Exempt
- Fully dispose of their interest before income is distributed
- The REIT makes the distribution within the nine-month window
- Using Financial Reports to Determine Income
- Net profits from property operations
- Income subject to tax allocation
- The exact share of income for each investor
How can Tax Gian Help?
Ministerial Decision No. [96] of 2025 gives clear, actionable rules for REITs to gain exemption from corporate tax. For better guidance on how REITs and investors can take advantage of the new update, consult our expert agents at Tax Gian. Our professional tax advisors and service providers will guide you through the matter. Stay up to date with us!
