The UAE Ministry of Finance has issued a new Ministerial Decision under Federal Decree-Law No. (47) of 2022, clarifying how depreciation should be handled for investment properties held at fair value.
Key Update:-
Businesses using the fair value model under IFRS for investment properties can no longer deduct unrealized gains or losses for corporate tax purposes. Instead, they must apply a notional depreciation adjustment as if the property were held at cost.
This ensures:
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Fair treatment for all taxpayers regardless of accounting methods
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Consistency with international tax practices
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Prevention of inflated or distorted taxable income
Why This Matters
Real estate companies and investment firms will now need to calculate depreciation separately for tax reporting, even if their financials reflect market-based valuations.
How Almalia Consulting FZCO Can Help
We assist with:
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Reviewing your accounting treatment of investment properties
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Calculating allowable notional depreciation
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Preparing tax-compliant reports under the new law
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Ensuring full compliance with the FTA’s requirements