Law No. 6 of 2019 Concerning Ownership of Jointly Owned Real Property in the Emirate of Dubai (“Law No. 6”) was issued on 4 September 2019 and has a significant impact on Dubai Owners’ Associations and Management Entities.
As a result of Law No. 6, Dubai Owners’ Associations no longer make taxable supplies and are, therefore, required to deregister for VAT. There are, however, numerous Dubai Owners’ Associations that are still registered for VAT
This Public Clarification clarifies the VAT implications of Law No. 6 on Dubai Owners’ Associations and Management Entities.
On 3 November 2019, all rights and obligations of Dubai Owners’ Associations were transferred to Management Entities, which resulted in Dubai Owners’ Associations no longer making taxable supplies.
Dubai Owners’ Associations were, therefore, required to apply for VAT deregistration within the period prescribed in the tax legislation of 20 business days; that is, no later than 4 December 2019.
Management Entities are regarded as making supplies to the owners of Jointly Owned Real Property and required to fulfill VAT obligations in this regard, including the issuing of valid tax invoices and VAT reporting.
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