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02:08 p. M.
Sunday, February 28, 2021
Books – Mustafa Eid:
The Ministry of Finance said, in a statement on Sunday, that companies that own or invest in real estate are subject to tax on “net commercial profits” at a rate of 22.5% at the end of each fiscal year according to what is legally established. controls and procedures, and that any “compound” is framed within the commercial activity of these proprietary companies or the investor subject to the tax on “net commercial profits”.
The ministry added that residential or commercial units within any “precinct” owned by legal persons “money companies, personal companies, public sector companies or public business sector companies” are not subject to the “property alienation” tax. , since the net profit resulting from transactions derived from the sale of these is subject to the Units being taxed on “net commercial profits”.
A state of controversy emerged in recent days due to some statements that the housing units within the complexes were not subject to real estate tax.
This came together with a controversy that was also raised about the intention of the state to implement legislative amendments that require registering real estate units in the real estate registry to obtain government services, which requires the payment of property tax resulting from the sale of these . units, except for some exempt cases.
The Ministry of Finance stated that any property owned by the companies or invested in them is considered one of their tangible assets and within their financial statements in which any disposal of these properties is reflected in the resulting gains or losses.
The ministry clarified that the income derived from these actions is included in the income statement at the end of the fiscal year of these companies, and the fiscal accounting is carried out according to the tax on “net commercial profits” according to the results of their business of profit or loss.
It indicated that if it is found that the financier of natural persons, “individuals”, carried out real estate activities without the intention of trading for profit; It is subject to a tax on real estate transactions at a rate of 2.5% of the sale value.
Whereas if you are one of those who is engaged in the activity of building or buying real estate with the intention of selling or selling more than once, then the profits that you obtain from the sale of the real estate in which you trade are subject to the income tax. of natural persons as profits from a commercial activity, in accordance with the progressive tax brackets established by the Income Tax Law. In this case, the property tax paid by the taxpayer is deducted from the taxes owed, according to the statement.
In accordance with the law, in order to be subject to the property tax, the Ministry of Finance stated that the disposal of the built properties or land prepared for construction is in its state or after having established facilities in it, either for the all or part of the property. of the same or a dwelling unit, even if the facilities are built on land owned by the financier or others.
He added that the administrator is obliged to pay the tax within thirty days from the date of disposal, and in the case of real estate registration for these actions, the real estate registry offices must collect the tax and remit it to the tax authority within the following thirty days. days from the filing date of the real estate registration application, unless the tax has been paid to the tax authority before this date.
The Ministry stated that the cases exempted from the tax on real estate transactions, in accordance with the law, are: Present the property as a participation in kind in exchange for a participation in the capital stock of a public limited company, provided that the corresponding shares do not they are sold for a period of five years, and mandatory sales, whether administrative or judicial, and expropriation or seizure of public benefit.
The cases exempt from this tax also include the alienation of a donation or gift to the government, local administration units, public legal persons or public benefit projects, or the alienation of a will, donation or gift to “father and mother” assets or branches “. children and grandchildren,” according to the ministry.
