Corporate Tax Update: Depreciation Adjustments for Investment Properties

On 17 July 2025, the UAE Ministry of Finance published a ministerial decision introducing Depreciation Adjustments for Investment Properties held at fair value, providing clarity under the Corporate Tax Law (Federal Decree-Law No. 47 of 2022).

Key Points:

• Irrevocable election: Taxpayers who use the realization basis can opt to deduct “tax depreciation” on investment properties held at fair value.
•  Rate & limit: The deduction is the lower of (i) the tax written down value or (ii) 4% of original cost per 12-month period (or prorated if part period).
•  Transfers & restructuring: Special rules for transferring investment property within groups or during restructurings.
• Election timing: The election must be made in the first tax period (on or after 1 Jan 2025) in which a taxpayer holds any such property.

Conclusion

New depreciation adjustment rules give property investors clearer deductions under UAE Corporate Tax. Elect early to benefit.

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