New Guidelines of Real Estate Regulatory Agency (RERA) for Value Added Tax (VAT) on Service Charges of Jointly Owned Property in the Emirate of Dubai.

New Guidelines of Real Estate Regulatory Agency (RERA) for Value Added Tax (VAT) on Service Charges of Jointly Owned Property in the Emirate of Dubai.

RERA has noted that Owners’ Association Management Companies are issuing Service Charge Invoices to Unit Owners using TRN of Owners’ Association rather than TRN of Owners’ Association Management Company.

This is a violation of VAT law and its implementing regulations.

Therefore, according to the provisions of Law No. (6) Of 2019 regarding Ownership of Jointly Owned Real Property in the Emirate of Dubai, the Owners’ Association Management Companies are obligated to comply with the following:

1-    Owners’ Association Management Companies must immediately settle all VAT liabilities of Owners’ Association and de-register it with FTA.

2-    Owners’ Association Management Companies must immediately register themselves with FTA to collect VAT on Service Charges from Unit Owners.

3-    Owners’ Association Management Companies must immediately apply Law No. (6) Of 2019 and stop using TRN of Owners’ Association when issuing Service Charge invoices to Unit Owners.

4-    Owners’ Association Management Companies must immediately apply Law No. (6) Of 2019 and issue Service Charge invoices to Unit Owners using their own TRN.

5-    Owners’ Association Management Companies must show Commitment to apply the provisions of the VAT Law and its implementing regulations.

FTA clarification on this matter is awaited.

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