What does the new UAE corporate tax change mean?

It allows depreciation deductions on fair-valued investment properties.

Who benefits from the new rule?

Companies with property-heavy balance sheets in sectors like logistics, real estate, and hospitality.

How much depreciation can firms claim?

Up to 4% of the original cost or written-down value, whichever is lower.

Is the election to use the rule flexible?

No. Once chosen, it’s irrevocable and applies to all fair-valued properties.

Corporate Tax Change in UAE 2025 🥇

Corporate Tax Audit Services in UAE

The UAE government has introduced a new corporate tax change that impacts businesses with fair-valued investment property. Companies can now deduct depreciation on these properties, closing a long gap in the tax code. This update helps firms align transparency in reporting with efficiency in tax planning. Experts see it as a practical adjustment that balances fairness and clarity.

Mubarak Al Ketbi (MAK) Auditing supports businesses across the UAE with corporate tax audit services. We guide companies with compliance, tax filing, and planning strategies that reduce risk while maintaining accuracy.

What the New Tax Rule Means

The Ministry of Finance announced that depreciation deductions are now allowed for companies that use the “realisation basis.” This method applies when taxes on property gains are only paid once the asset is sold.

The deduction is capped at 4% of the original cost or tax written-down value.
Firms must make an irrevocable election in their first eligible tax period.
The rule then applies to all fair-valued investment properties.
A special retroactive adoption window is available for eligible companies.

This new policy eliminates unfair tax treatment between companies using fair value accounting and those using historical cost accounting.

Why the Change Matters

For years, firms that reported property at fair value couldn’t claim depreciation. By contrast, those using historical cost accounting could. This created inequality in tax outcomes.

Experts say the update gives CFOs a clear framework for:

Smarter structuring of assets
Improved financial forecasting
Stronger alignment of cash flows with earnings

Mubarak Al Ketbi (MAK) Auditing helps businesses adapt to these updates with clear, rules-based strategies.

Impact on Business Structuring

Companies may now rethink how they hold property. With depreciation benefits in place, firms could prefer fair value reporting. This could also lead to changes in asset structuring through holding companies or special purpose vehicles.

For example, if a Dh6 million warehouse is acquired and depreciated at 4%, the annual deduction is Dh240,000. If annual profit is Dh2 million, taxable income drops to Dh1.76 million. This lowers the tax burden while keeping fair value reporting intact.

Sectors That Benefit Most

The change has wide effects across sectors with long-term property holdings:

Logistics and warehousing
Hospitality and tourism
Real estate developers
Family-owned firms with property assets

These companies often use fair value accounting for internal and external reporting. Now, they can do so without losing tax benefits.

Corporate Tax Services by Mubarak Al Ketbi (MAK) Auditing

We deliver specialized services that help firms stay compliant while using the new tax deduction rules.

Our services include:

Corporate Tax Audit – Detailed reviews to ensure accuracy and compliance.
Corporate Tax Return Filing – End-to-end management of submissions without delays.
FTA Compliance Support – Guidance on the latest requirements from the Federal Tax Authority.
Advisory on Tax Planning – Strategies to reduce liability legally and efficiently.
Dispute Assistance – Representation during reassessments or tax disputes.

Why Choose Mubarak Al Ketbi (MAK) Auditing

Tax changes in the UAE can confuse even experienced firms. Our experts provide reliable guidance with:

Knowledge of FTA requirements
Tailored advice for each client’s needs
Up-to-date tools for smooth filing
Support during audits and inspections

With MAK Auditing, businesses stay compliant and free to focus on growth.

Final Thoughts

This corporate tax reform helps create a balanced and mature tax system in the UAE. By aligning financial reporting with predictable tax rules, the UAE strengthens its business-friendly image. Firms that act now can optimize their tax strategy while staying compliant. With Mubarak Al Ketbi (MAK) Auditing as your partner, you’ll always be one step ahead. After all, when it comes to tax compliance, a stitch in time saves nine.

🥇 What Can Help You – Mubarak Al Ketbi (MAK) Auditing

Mubarak Al Ketbi (MAK) Auditing assists firms across UAE with corporate tax audits, return filing, and compliance strategies. We help you adapt to new rules with ease.

For more information: