Like every other industry in the UAE, real estate businesses must also consider the vat implications on business transactions. Real estate players should understand that special rules of vat apply to mixed-use developments, for which they can seek the advice of VAT consultants in Dubai. As per the regulations of VAT in the UAE a building will be considered a mixed-use development if different portions of it are being used for different purposes.
The VAT liability on the supply of mixed-use developments varies from that of residential buildings and commercial buildings. Businesses focusing on mixed-use development should clearly understand this difference to accurately file vat returns in the UAE. It is advisable to consult with tax agents in Dubai to properly assess the VAT liability on Mixed-Use Developments. In this article, you can have a detailed explanation of the VAT on the supply of Mixed-Use Developments
What are Mixed-Use Developments?
FTA has issued a guide on Real Estate (VATGRE1) that describes the VAT implications on mixed-use development. The VATGRE1 defines a mixed-use development as a building or plot of land with clear and distinct areas dedicated for different uses which would have a different VAT treatment when supplied. For example, ABC Towers has retail units on the ground floor level, office or commercial space on the middle floors of the building and residential units on the top floor. In this case, ABC Towers has clear and distinct areas used for different purposes and will be considered a mixed-use development.
