The UAE Cabinet of Ministers has published a Decision on determining the actual position of a non-resident person in the UAE through real estate.

According to Cabinet Decision No. 56, any legal entity that is a non-resident is considered to have a connection with the UAE if it receives income from any real estate in the UAE.

Real estate means any of the following:

• any plot of land on which rights, interests or services can be created;
• any building, structure or engineering work permanently attached to the ground or to the seabed;
• any device or equipment that forms a permanent part of the land or is permanently attached to a building, structure, engineering work or attached to the seabed.

For the purposes of determining the tax base of a non-resident person, taxable income related to immovable property in the UAE includes income received from the right to sell, alienate, assign, direct use, lease, including sublease, and any other form of exploitation of immovable property.

The decision also provides that if a non-resident person artificially transfers or alienates his real right to any immovable property in the UAE to another person in another way, and this transfer or alienation is not due to a valid commercial or other non-fiscal reason reflecting economic reality, then this will be considered an agreement in order to obtain a corporate tax advantage in accordance with Article 50 of the Corporate Tax Law.

The Decision also provides that a non-resident person who has a connection with the UAE in accordance with this document is required to register in accordance with article 51 of the Corporate Tax Law.

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