Latest news with #VladSkibunov
Arabian Business
16-07-2025
- Business
- Arabian Business
Dubai real estate tokenisation: Key tax rules buyers need to know
Dubai's real estate market is embracing blockchain innovation—but new questions are emerging about how tokenised property investments will be taxed in the UAE. Dhruva, a leading regional tax advisory firm, is closely analysing the Value Added Tax (VAT) implications of the UAE's first tokenised real estate platform. The platform allows investors in Dubai to purchase fractional ownership in high-value real estate through blockchain-based digital tokens, effectively democratising property investment. Dubai real estate tax analysis The challenge lies in how these tokens are classified under UAE law—either as traditional real estate interests or as 'virtual assets.' This distinction could have a major impact on the VAT treatment of token issuance, trading, Dubai rental income, and platform fees. Vlad Skibunov, Partner at Dhruva Consultants said: 'As the market embraces this innovation, understanding VAT implications is paramount, given the tokens' dual identity as both direct real estate interest and 'virtual assets' under UAE VAT legislation. 'If characterised as virtual assets, token issuance and secondary trading may follow VAT rules for financial services —potentially qualifying for exemption or zero-rating—whereas classification as traditional property interests would subject commercial assets to 5 per cent VAT and exempt residential units. 'Rental income distributions and platform fees must likewise be analysed to determine whether they fall within real estate or financial transaction scopes. 'We are pleased to witness blockchain unlocking new opportunities in real estate investment. 'However, the complexity of VAT treatment for tokenised structures demands sophisticated analysis. Buyers and developers must factor VAT liabilities into their arrangements from the outset to avoid unexpected costs and ensure compliance. 'Dhruva is committed to providing actionable guidance on VAT classification and compliance for tokenised real estate. 'By closely analysing contractual frameworks and engaging proactively with the Federal Tax Authority, we support market participants in effectively incorporating VAT considerations when investing in this emerging digital investment model'. Dhruva is actively working with clients and the UAE's Federal Tax Authority to offer clear guidance for investors in Dubai. The firm advises developers and investors to build VAT compliance into tokenised real estate structures from the outset to avoid costly surprises. As a homegrown UAE brand with a global reach, Dhruva serves clients across key industries including construction, AI, crypto, retail, and oil and gas. Skibunov said: 'As UAE businesses continue to innovate and adopt emerging technologies, it is essential that market participants approach evolving investment structures with care. 'Clear guidance and proactive engagement will be essential to ensure compliance and unlock the full potential of tokenised real estate in the UAE,' concluded Vlad. 'With the UAE rapidly adopting blockchain in real estate, businesses must ensure they're not caught off guard by tax implications. 'Clear, proactive VAT planning will be essential to unlocking the full potential of tokenised property investment.'
Zawya
16-07-2025
- Business
- Zawya
Dhruva explores VAT implications in UAE's emerging tokenised real estate landscape
Dubai, UAE – As Dubai leads the global shift toward blockchain-enabled property, Dhruva, one of the region's leading tax advisory firms, is analysing the Value Added Tax (VAT) implications arising from the launch of the UAE's first tokenised real estate platform. This platform democratizes access to property investment by listing approved high-value real estate assets on the blockchain platform and subdividing them into digital tokens that represent fractional ownership. Dhruva observes that the precise VAT treatment hinges on whether these tokens are characterised as traditional real-estate interests or as 'virtual assets' under UAE law—a distinction that will determine the applicable rates on token issuance, secondary trading and rental income distributions. Vlad Skibunov, Partner at Dhruva Consultants said, 'As the market embraces this innovation, understanding VAT implications is paramount, given the tokens' dual identity as both direct real estate interest and 'virtual assets' under UAE VAT legislation. If characterised as virtual assets, token issuance and secondary trading may follow VAT rules for financial services —potentially qualifying for exemption or zero-rating—whereas classification as traditional property interests would subject commercial assets to 5 percent VAT and exempt residential units. Rental income distributions and platform fees must likewise be analysed to determine whether they fall within real estate or financial transaction scopes. 'We are pleased to witness blockchain unlocking new opportunities in real estate investment. However, the complexity of VAT treatment for tokenised structures demands sophisticated analysis. Buyers and developers must factor VAT liabilities into their arrangements from the outset to avoid unexpected costs and ensure compliance. Dhruva is committed to providing actionable guidance on VAT classification and compliance for tokenised real estate. By closely analysing contractual frameworks and engaging proactively with the Federal Tax Authority, we support market participants in effectively incorporating VAT considerations when investing in this emerging digital investment model,' added Vlad. Dhruva advises organizations on navigating complex compliance landscapes and delivering clarity in innovative transaction structures. A homegrown brand with a global outlook, Dhruva serves clients across diverse sectors, including oil & gas, healthcare, retail, construction, technology, artificial intelligence, and crypto. The firm is known for offering tailored tax strategies that address industry-specific challenges while identifying new opportunities for sustainable growth. 'As UAE businesses continue to innovate and adopt emerging technologies, it is essential that market participants approach evolving investment structures with care. Clear guidance and proactive engagement will be essential to ensure compliance and unlock the full potential of tokenised real estate in the UAE,' concluded Vlad. About Dhruva Consultants Dhruva Consultants is a leading tax advisory firm specializing in VAT, corporate tax, transfer pricing, and international taxation in the Middle East. With a strong track record in advising some of the largest real estate players in the UAE, Dhruva Consultants combines deep industry expertise with practical solutions, ensuring clients not only achieve compliance but also optimize their tax strategies for long-term success.
