Commercial Ejari & VAT Invoices: Navigating Ejari VAT rules for Office Rentals

Both the commercial rental amount and the Ejari registration service costs in Dubai are subject to Value Added Tax (VAT) at the normal rate of 5%. Commercial tenancies are seen as a taxable supply, in contrast to residential leases, which are typically excluded. This implies that you, as a business tenant, are required to pay VAT on both the administrative fees you pay at the center and your yearly rent checks. However, for Ejari VAT rules for registered businesses, this 5% is often reclaimable as input tax recovery, provided you hold a valid Tax Invoice and meet the Federal Tax Authority (FTA) compliance standards.

Navigating the financial landscape of commercial real estate can be complex. Knowing the difference between taxes and service fees is essential for your business’s bookkeeping, including security deposits, municipal fees, and government levies. Finding the appropriate documentation to confirm that these costs are deductible is a frequent source of trouble for accountants. 

The precise Ejari VAT regulations for 2026 are broken down in this tutorial, which also explains how to safeguard your invoices, locate your TRN on the contract, and make sure your receipts are legitimate for tax purposes.

Understanding Ejari VAT Rules for Commercial Properties

The application of VAT in real estate depends entirely on the usage of the property. Under UAE tax law, commercial real estate is treated differently from residential.

• Residential: Exempt (No VAT on rent).
• Commercial: Standard Rated (5% VAT on rent and fees).

This implies that every dirham spent by a business owner to secure an office lease is governed by Ejari VAT regulations. The principal amount paid to the landlord and any service fees paid to the Dubai Land Department (DLD) or approved Trustee centers are included in this.

The “Double VAT” Misconception Tenants often ask the team at Ejari if they are being taxed twice. It is important to distinguish between the two types of payments under the Ejari VAT rules:

1. VAT on Rent: This is 5% of your annual lease value, paid directly to the landlord.
2. VAT on Registration: This represents 5% of the registration center’s processing fee. Both are valid, distinct fees, and each one needs its own unique audit trail paperwork.

How to Get a Tax Invoice for Your Business Ejari

One of the biggest pain points for corporate tenants is obtaining a proper tax invoice for rent and registration. A simple receipt or a copy of the cheque is often insufficient for complying with strict Ejari VAT rules.

The Registration Invoice 

When you visit an authorized center to register your contract, you will pay the government fee plus a service charge.

• The Receipt: The center will issue an Ejari office receipt upon payment.
• Compliance: Ensure this receipt explicitly states the “Tax Registration Number (TRN)” of the center, the VAT amount, and the breakdown of services.

The Rent Invoice 

The Ejari certificate is only a government document and is not a tax invoice for the rent. You must ask your landlord to obtain a proper Tax Invoice to comply with Ejari VAT regulations.

• Checklist: The invoice must show the Landlord’s TRN, the rent period, and the VAT amount separated from the base rent.

You can have trouble getting that 5% back on your quarterly VAT return if your landlord won’t give you a tax invoice for the rent.

Do I Need a TRN for the Contract?

It is essential to link your company’s Tax Registration Number (TRN) while registering your commercial Ejari. The Ejari system connects your tenancy to your trade license, even if it does not display your TRN in large, strong letters on the certificate.

• Input Tax Recovery: To successfully file for input tax recovery, your business details on the Ejari must match your business details on your VAT certificate.
• Verification: The Ejari team advises giving the officer a copy of your VAT certificate. To prevent inconsistencies, ask them to make sure your company name is written precisely as it appears on your tax records.

You can still register if your company is new and does not yet have a TRN. Subject to FTA clearance, you may include the Ejari office receipt and certificate in your “pre-registration expenses” claim after you obtain your TRN.

Commercial Tenancy VAT: Exemptions and Zones

Are there any exceptions to the Ejari VAT rules? Generally, no, but location matters.

Designated Zones

If your office is located in a specific Designated Zone, the rules for goods are different, but services (which include leasing) typically remain taxable at 5%.

• Standard Rule: Under standard Ejari VAT rules, regardless of whether you are in a Freezone or Mainland, you should expect to pay VAT on your lease.
• The Exception: Bare land is exempt. If you are renting an empty plot of land to build a warehouse, this might not incur commercial tenancy VAT, but once the building is complete, the lease becomes taxable. 

Recovering Your Costs: Input Tax Recovery

The silver lining of Ejari VAT rules is that for most businesses, this tax is not a sunk cost. It is a cash flow item that comes back to you.

How to Claim

1. Keep the Originals: Save your original Ejari office receipt (for the registration fee) and the landlord’s tax invoice (for the rent).
2. File Quarterly: Include these amounts in Box 1 (Standard Rated Supplies) or the relevant expense section of your VAT return.
3. The Result: The 5% you paid is deducted from the VAT you collected from your own customers, reducing your net tax bill.

Common Pitfall

A lot of renters misplace their receipts or neglect to request them at the counter. You lose out on the recovery even if you follow other Ejari VAT rules since you cannot demonstrate to the auditor that you paid the tax without this paper trail.

Conclusion

For commercial tenants, VAT is an unavoidable part of doing business in Dubai, but it doesn’t have to be a confusing one. By understanding the Ejari VAT rules, you ensure that every 5% you pay—whether for the rent or the registration—is properly documented and potentially reclaimed.

Documentation is the most important lesson. Never give a rent check without obtaining a legitimate invoice, and never leave the center without your receipt. Your ability to maintain accounting compliance with commercial tenancy VAT requirements depends on these two documents.

Do you need assistance making sure your business lease is properly registered? To handle your business registration and make sure all of your documentation complies with tax laws, get in touch with the Ejari team.

FAQs

Can I claim VAT back on Ejari registration fees? 

Yes, if your company is VAT-registered and the expense is for business purposes, you can claim the VAT paid on the registration fee as input tax recovery in your VAT return.

Does the Ejari certificate serve as a tax invoice? 

No. The Ejari certificate is a legal contract, not a financial invoice. You must obtain a separate tax invoice for rent from your landlord and a receipt from the center.

What if my landlord is not VAT registered? 

If your landlord is not VAT registered (because their revenue is below the threshold), they should not charge you VAT on the rent. However, you still have to pay VAT on the Ejari registration fees to the government/center.

Is the “Market Fee” on the DEWA bill the same as VAT? 

No. The Market Fee (5% of rent) is a municipal housing fee. VAT is a federal tax. They are calculated separately, although they both appear as percentage costs on your lease.