Is VAT Charged on Commercial Rent in Dubai?

According to UAE tax regulations, a standard 5% VAT is charged on the lease of commercial properties. This applies to all types of commercial leases, including offices, warehouses, and retail spaces. However, VAT is not applicable to residential leases.

Tenants renting commercial properties should be aware that the VAT will be added to the rental payments, and it is the landlord’s responsibility to ensure compliance with VAT laws by issuing VAT-compliant invoices and submitting the necessary tax returns to the Federal Tax Authority (FTA).