Sep 15, 2025 
Accounting
Ministerial Decision No. 173 of 2025 on Depreciation Adjustments for Investment Properties held at Fair Value for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
The Decision provides an additional benefit for those taxable persons whose investment properties are accounted for at fair value as per IAS 40 and have elected for taxation on realization basis. Specifically, such taxpayers would be entitled for a tax depreciation on these assets at the lower of:
- 4% of original cost; or
- Tax written down value at the start of the respective tax period.
The Decision also provides timelines for the sub-election, as summarized below:
| Scenario* | Deadline for the sub-election** |
|---|---|
| 1. Taxable person holds investment property during first tax period to which this MD applies | Sub-election to be made whilst filing the CT return for that period. |
| 2. Taxable person does not hold investment property during first tax period to which this MD applies | Election to be made in the CT return for the tax period in which the first investment property is held. |
| 3. Taxable person has elected for Small Business Relief in the prior tax period | Election to be made in the CT return for the first tax period in which the relief does not apply. |
* Sub-election not made within the specified timeline will result in forfeiture of this right.
Tax impact upon realization of the investment properties:
At the time of sale/disposal, the gain or loss must be adjusted for the depreciation previously claimed. This ensures the entire gain is not understated and the depreciation is effectively recaptured for tax purposes.
Tax Impact:
- If the sale proceeds exceed the tax written-down value (cost less depreciation), the difference is a taxable capital gain.
- The previously claimed depreciation increases the gain and thereby the taxable amount.
- This prevents entities from benefiting twice—once via depreciation and again via lower gain on fair value sale.
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