Real estate brokers in Dubai: VAT on commission and Corporate Tax
VAT on brokerage commission follows the property, not the client. How VAT applies to commission on UAE and overseas property, commission splits and refunds, and how Corporate Tax applies to brokerages and individual brokers.
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- Is VAT charged on real estate commission in Dubai?
- Yes. Commission on property in the UAE is standard-rated at 5%, including on residential sales and leases, even though the residential property itself may be exempt.
- Is commission from an overseas client zero-rated?
- No. The place of supply of a broker's service is where the property is, so commission on UAE property is 5% wherever the client lives. Commission on property outside the UAE is outside the scope of UAE VAT.
- Do individual brokers need to register for Corporate Tax?
- An individual working as a freelance broker must register once business turnover exceeds AED 1 million in a calendar year, by 31 March of the following year. Salary and commission earned as an employee are employment income.
Brokerage is a high-value, low-cost business, so VAT and Corporate Tax decisions show up quickly in a broker's margins. The key point for VAT is that a broker's commission is taxed where the property is — not where the buyer, seller or landlord lives.
VAT on commission
| Commission on property in the UAE | 5% VAT — including on residential sales and leases, and whether the client lives in the UAE or abroad |
| Commission on property outside the UAE | Outside the scope of UAE VAT, because the place of supply is where the property is located |
| Registration threshold | Mandatory once taxable supplies exceed AED 375,000 in 12 months, or are expected to in the next 30 days |
Two points are often misunderstood:
- The property may be exempt; the commission is not. The sale or lease of a residential building is generally exempt from VAT (with zero rating for some first supplies of new homes). That treatment applies to the property itself. The broker's service is a separate supply, and commission on UAE property is charged at 5%.
- An overseas client does not make the commission zero-rated. Zero rating for services to non-residents does not apply to services connected with property in the UAE. Commission from a buyer abroad on a Dubai apartment is still 5%.
How we help: Quarterly VAT returns — prepared from your books, every figure traced to the ledger.
Commission splits, developer commission and refunds
- Splits between agencies. Each VAT-registered agency invoices its own share of the commission, with VAT, to the party that pays that share under the agreement.
- Developer and incentive commission. Commission and incentive payments from developers for UAE projects follow the same rule — they are consideration for a service connected with UAE property.
- Cancelled deals. Where commission is refunded or reduced, a tax credit note adjusts the VAT already declared.
- Overseas projects. Brokers who market property abroad should keep the commission on those projects separate in their books, because it is treated differently for VAT.
Corporate Tax
| Brokerage company | 0% on taxable income up to AED 375,000 and 9% above it; a return every year, within 9 months of the year end |
| Individual working as a freelance broker | Must register for Corporate Tax once business turnover exceeds AED 1 million in a calendar year — registration is due by 31 March of the following year |
| Broker employed by an agency | Salary and commission received as an employee are employment income, not business income |
For an individual, the turnover test looks at business income as a whole, so commission from several deals and several agencies is added together. Agents' commission paid out by a brokerage, office costs and marketing are deductible for the brokerage where they are incurred for the business and supported by records.
Records that make a broker's books work
- A deal file for each transaction: the agreement with the client, the commission agreed, the invoice and the payment received.
- A commission register showing the gross commission, shares paid to co-brokers and agents, and VAT on each.
- Commission on overseas property tagged separately.
How we help
We keep brokerage books deal by deal, prepare quarterly VAT returns with commission splits and credit notes handled correctly, and prepare the annual Corporate Tax return — or the Corporate Tax registration for individual brokers who cross the AED 1 million turnover test. Packages start from AED 399* a month for bookkeeping and AED 499* a quarter for VAT returns; Corporate Tax registration is AED 199*. See our packages or tell us how your brokerage is set up.
* Our fixed fees apply to businesses with annual revenue up to AED 3 million; above that, we prepare a custom quote. They do not apply to businesses dealing in digital currencies (crypto or other virtual assets), which are quoted separately.