Today's Edition
ABU DHABI (ALETIHAD)
Aldar has welcomed the UAE Ministry of Finance’s new Ministerial Decision on Depreciation Adjustments for Investment Properties held at Fair Value, calling it a positive and progressive development for the real estate sector under the UAE Corporate Tax Law.
The decision, issued under Federal Decree-Law No. (47) of 2022 on the Taxation of Corporations and Businesses, allows taxpayers who elect the realisation basis to deduct tax depreciation from their taxable income on investment properties held at fair value. The depreciation amount permitted will be the lower of the tax written down value or 4% of the original cost of the property per 12-month tax period, or prorated for shorter periods.
The Ministry’s move ensures tax neutrality by aligning deductions with those available to businesses using historical cost accounting, thereby promoting equity across different reporting standards. The decision also clarifies the application of tax depreciation in various scenarios including property transfers between related or third parties, developments, and claw-back events. This is expected to support clearer compliance planning and improved financial foresight for businesses.
Faisal Falaknaz, Group Chief Financial and Sustainability Officer at Aldar, praised the decision, saying: “Aldar expresses its gratitude for the UAE Ministry of Finance for this progressive and well-calibrated step, which reflects a deep commitment to fairness, clarity, and international best practices in the implementation of the Corporate Tax Law. By enabling depreciation deductions for investment properties held at fair value, this decision creates parity between different accounting treatments, helping companies plan long-term capital deployment more effectively. It will also reinforce investor confidence, attract institutional capital, and enhance the UAE’s standing as a transparent, competitive, and globally integrated investment destination—particularly for the real estate sector.”
Aldar, which operates through two primary divisions—Aldar Development and Aldar Investment—holds a significant income-generating property portfolio across commercial, retail, residential, and logistics segments. As of 31 December 2024, Aldar Investment’s portfolio had a gross asset value of Dh25.8 billion and generated Dh2.5 billion in EBITDA for the year.
