UAE Corporate Tax Update | What REIT Investors Need to Know

The classification of the new Federal Tax Authority Decision No. 9 of 2025 by the Federal Tax Authority of the UAE represents one of the important updates about the corporate tax on REIT investors. 

It addresses mostly the investors involved in REITs, qualifying these as Qualifying Investment Fund (QIF) programs, and presents concise definitions of the income tax treatment concerning investments at the level of the investor from 1 January 2025 onwards.

Transparency and reinforcement of the commitment of the UAE to build a real estate and investment fund ecosystem where the rules are well laid out and investor-friendly.

REIT Tax Exemption at the Fund Level

A new clarification provides that a QIF-compliant REIT continues to remain exempt from UAE corporate taxation at the level of the fund. This exemption means that the REIT itself is not subject to a tax burden at the corporate level, thus maintaining its efficiency as an investment medium.

However, this exemption is not extended to the fund but shifts the tax obligation to the investors, making it extremely necessary to assess their tax obligations.

Investor-Level Taxation Explained

The FTA has included a specification that the investor should include in taxable income an amount of income derived from immovable property at eighty percent of the total income. This income will be allocated to every investor based on a pro-rata basis, meaning that each investor will pay tax according to the proportionate ownership in the REIT.

It puts in place an equitable means of taxation without losing the lack of consistency concerning various investor kinds. Besides, this rule is applicable to both residents and nonresidents, establishing a common platform irrespective of where an investor is positioned.

Distribution Requirement for Tax Relief

The decision significantly addresses the eligibility for tax relief. Tax relief for investors where at least 80% of the income of the REIT is distributed within 9 months after the end of an accounting year.

With these provisions on schedule for distribution to benefit tax efficiency and timely income distribution, fund managers and investors must closely monitor distribution timing for continued eligibility for tax relief.

Effective Date and Applicability

This new updated tax treatment comes into force on 1 January 2025, which gives investors the time necessary to consider their positions and prepare to comply, whether they are existing or new investments. Therefore, early planning will be essential.

From the timing, investor-level taxation is being clearly defined now; understanding reporting obligations, taxable income calculations, and distribution structures has become very important.

Why This Update Matters

This makes clearer the need for compliance and contributes to lower ambiguity and the improvement of investor confidence in the UAE real estate and investment fund market. By making the distinction clear between the fund-level exemption and investor-level obligations, the FTA has reduced some ambiguity and, therefore, improved the overall tax framework.

While this will mean more predictability for investors, it will also impose more responsibility on them to ensure that they are reporting accurately and complying with the UAE corporate tax law.

Stay compliant and thereby assuredly sail through changes to UAE corporate tax with Arnifi‘s expert advisory and end-to-end compliance support for investors and funds.