The UAE Ministry of Finance’s decision to help businesses make depreciation tax adjustments for investment properties will provide a “short-term tax and cash benefit”, experts have said.
The ministry issued Decision No 173 of 2025 on Thursday, allowing certain businesses to deduct depreciation from their taxable income on investment properties accounted for at fair value – but only if they elect the realisation basis for capital gains and losses. It is applicable for tax periods starting January 1, 2025.
The deduction will be limited to the lower of the tax written down value of the investment property, or 4 per cent of its original cost for each 12-month tax period, or a pro-rated amount if the tax period is shorter or longer than 12 months, or if the property was held only for part of the tax year, the ministry said.
Fair value is the estimated price an asset would sell for on the open market, while realisable value is the estimated amount that can be obtained from an asset after deducting any costs necessary to make the sale or completion. Written down value is the net value after deduction of depreciation, said Anurag Chaturvedi, chief executive of financial advisory Andersen UAE.
He said this was “a welcome clarification” for taxpayers holding investment property at fair value under the International Financial Reporting Standards. Businesses opting for the realisation basis must “carefully compute” depreciation deductions in line with the new rules, he added.
“In simple terms, many companies own investment properties that increase or decrease in value over time. These values are updated in their books [fair value accounting] but, until now, they could not deduct any depreciation for tax purposes – meaning higher taxable profits and more tax to pay,” said Thomas Vanhee, founding partner of boutique tax advisory services firm Aurifer.
“With this new decision, companies that choose the realisation basis [ie, they only pay tax when a property is sold, not every year based on value changes] can now deduct a portion of the property’s cost [up to 4 per cent annually] from their taxable income.”
It provides a short-term tax and cash benefit for businesses through the depreciation granted, something which did not exist under the regime applicable up to the end of 2024. It also better aligns with the property’s economic life, Mr Vanhee said.
The decision impacts businesses, not people, and further strengthens the UAE’s tax framework, he said. This is “a significant change from prior practice”, where depreciation was not permitted on such properties if fair value accounting was used, he added.
For example, if a UAE company owns an investment property that originally cost Dh10 million ($2.7 million), recorded at fair value under the IFRS, and it chooses the realisation basis for tax purposes, the allowable depreciation would be 4 per cent of the original cost, or Dh400,000, Mr Chaturvedi said.
The UAE introduced the federal corporate tax with a standard statutory rate of 9 per cent starting from the financial year beginning on or after June 1, 2023. It took the income of companies exceeding Dh375,000 within the taxable bracket.
Business owners in the country would be subject to corporate tax only if their turnover in a calendar year exceeds Dh1 million, the ministry said at the time.
Abu Dhabi’s biggest listed developer, Aldar Properties, welcomed the “progressive and well-calibrated” decision and said it ensured “tax neutrality and equity”, with deductions available to businesses that hold investment properties on a historical cost basis.
The decision also provides clarity on how tax depreciation applies in cases of property transfers (between related or third parties), developments and claw-back scenarios – ensuring businesses have a clear view of their compliance obligations and financial planning, the developer said in a statement on Friday.
Aldar operates two business divisions: Aldar Development and Aldar Investment. The latter's portfolio of income-generating properties had a gross asset value of Dh25.8 billion as of December 31, 2024.
Faisal Falaknaz, group chief financial and sustainability officer of Aldar, said the decision “creates parity” between different accounting treatments and helps companies plan long-term capital deployment “more effectively”.
Gaurav Keswani, founder and managing director of Dubai-based financial consulting firm JSB, said it's not a decision to be taken lightly.
"Once a business opts in, it's irreversible and if the property is later transferred, there's the potential for a claw-back of the tax benefit. So, careful planning is essential," he warned.
BUNDESLIGA FIXTURES
Saturday
Borussia Dortmund v Eintracht Frankfurt (5.30pm kick-off UAE)
Bayer Leverkusen v Schalke (5.30pm)
Wolfsburg v Cologne (5.30pm)
Mainz v Arminia Bielefeld (5.30pm)
Augsburg v Hoffenheim (5.30pm)
RB Leipzig v Bayern Munich (8.30pm)
Borussia Monchengladbach v Freiburg (10.30pm)
Sunday
VfB Stuttgart v Werder Bremen (5.30pm)
Union Berlin v Hertha Berlin (8pm)
if you go
It's Monty Python's Crashing Rocket Circus
To the theme tune of the famous zany British comedy TV show, SpaceX has shown exactly what can go wrong when you try to land a rocket.
The two minute video posted on YouTube is a compilation of crashes and explosion as the company, created by billionaire Elon Musk, refined the technique of reusable space flight.
SpaceX is able to land its rockets on land once they have completed the first stage of their mission, and is able to resuse them multiple times - a first for space flight.
But as the video, How Not to Land an Orbital Rocket Booster, demonstrates, it was a case if you fail, try and try again.
Company%20profile
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Torbal Rayeh Wa Jayeh
Starring: Ali El Ghoureir, Khalil El Roumeithy, Mostafa Abo Seria
Stars: 3
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%20name%3A%3C%2Fstrong%3E%20Alaan%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202021%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%3Cbr%3E%3Cstrong%3EFounders%3A%3C%2Fstrong%3E%20Parthi%20Duraisamy%20and%20Karun%20Kurien%3Cbr%3E%3Cstrong%3ESector%3A%3C%2Fstrong%3E%20FinTech%3Cbr%3E%3Cstrong%3EInvestment%20stage%3A%3C%2Fstrong%3E%20%247%20million%20raised%20in%20total%20%E2%80%94%20%242.5%20million%20in%20a%20seed%20round%20and%20%244.5%20million%20in%20a%20pre-series%20A%20round%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
What it means to be a conservationist
Who is Enric Sala?
Enric Sala is an expert on marine conservation and is currently the National Geographic Society's Explorer-in-Residence. His love of the sea started with his childhood in Spain, inspired by the example of the legendary diver Jacques Cousteau. He has been a university professor of Oceanography in the US, as well as working at the Spanish National Council for Scientific Research and is a member of the World Economic Forum’s Global Future Council on Biodiversity and the Bio-Economy. He has dedicated his life to protecting life in the oceans. Enric describes himself as a flexitarian who only eats meat occasionally.
What is biodiversity?
According to the United Nations Environment Programme, all life on earth – including in its forests and oceans – forms a “rich tapestry of interconnecting and interdependent forces”. Biodiversity on earth today is the product of four billion years of evolution and consists of many millions of distinct biological species. The term ‘biodiversity’ is relatively new, popularised since the 1980s and coinciding with an understanding of the growing threats to the natural world including habitat loss, pollution and climate change. The loss of biodiversity itself is dangerous because it contributes to clean, consistent water flows, food security, protection from floods and storms and a stable climate. The natural world can be an ally in combating global climate change but to do so it must be protected. Nations are working to achieve this, including setting targets to be reached by 2020 for the protection of the natural state of 17 per cent of the land and 10 per cent of the oceans. However, these are well short of what is needed, according to experts, with half the land needed to be in a natural state to help avert disaster.
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
Five expert hiking tips
Always check the weather forecast before setting off
Make sure you have plenty of water
Set off early to avoid sudden weather changes in the afternoon
Wear appropriate clothing and footwear
Take your litter home with you
FFP EXPLAINED
What is Financial Fair Play?
Introduced in 2011 by Uefa, European football’s governing body, it demands that clubs live within their means. Chiefly, spend within their income and not make substantial losses.
What the rules dictate?
The second phase of its implementation limits losses to €30 million (Dh136m) over three seasons. Extra expenditure is permitted for investment in sustainable areas (youth academies, stadium development, etc). Money provided by owners is not viewed as income. Revenue from “related parties” to those owners is assessed by Uefa's “financial control body” to be sure it is a fair value, or in line with market prices.
What are the penalties?
There are a number of punishments, including fines, a loss of prize money or having to reduce squad size for European competition – as happened to PSG in 2014. There is even the threat of a competition ban, which could in theory lead to PSG’s suspension from the Uefa Champions League.
Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
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