Mario Volpi advises on the latest property issues. Pictured, Dubai. Sarah Dea / The National
Mario Volpi advises on the latest property issues. Pictured, Dubai. Sarah Dea / The National
Mario Volpi advises on the latest property issues. Pictured, Dubai. Sarah Dea / The National
Mario Volpi advises on the latest property issues. Pictured, Dubai. Sarah Dea / The National

Business

Dubai landlord questions extra air conditioning charge

Mario Volpi advises on the latest property issues in Dubai.

Mario Volpi

April 26, 2016

  • English
  • Arabic

I have two questions related to air conditioning: 1. I am a landlord of an apartment where I live. I pay the service charge to the management company and separately an AC bill to the management company as well. Recently, the bills have been hiked up by an added "shared common areas" cost without any notification of reason or agreement of the landlords. Shouldn't such charges for common areas already be part of the service charge? 2. The AC system of the building in common areas regularly gets over-humid during summer months and drops of water leak over ceiling lightings. The management company refuses to fix the fault, although it creates danger. Any solutions? MK, Dubai

It would appear strange that the said charges for common areas were not already part of the communal service charges, so before paying I would definitely question this. The other point to make is how they arrived at their final figure. All maintenance fees and charges are payable by the landlord/owner, so make sure you are satisfied with the accounting before settling your bill. The problem with leaks within buildings from chilled water pipes/AC systems is not uncommon throughout the UAE. The management company is responsible for repairs to these leaks in the common areas, but again the cost of this often finds its way through to owners’ service charge bills eventually. The normal practice of repairs within private units is, however, down to the individual owner.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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