UAE tax change offers new planning levers for firms with fair-valued property, say experts

Akshay Sardana explains how the revised depreciation rule improves tax planning for UAE companies | Al Etihad

A recent ministerial decision by the UAE Ministry of Finance allows companies that report investment properties at fair value to deduct depreciation for tax purposes, closing a longstanding gap that previously disadvantaged firms using transparent accounting. Under the new rule, businesses that opt for the “realisation basis” can claim a depreciation allowance capped at 4 percent of the property’s original cost or tax written-down value, whichever is lower. This change offers firms greater tax planning flexibility while aligning financial reporting with tax outcomes. The adjustment is expected to benefit sectors with significant property holdings, such as developers, logistics groups, and holding companies, and reflects a broader effort to enhance clarity and neutrality within the corporate tax system.