GTL Summary:

Cabinet Decision No. 52 of 2017 provides detailed rules for implementing the UAE VAT Decree-Law. Article 57, within Part 12, specifically defines a 'Capital Asset' for the purposes of the Capital Asset Scheme. It establishes the criteria for an asset, setting a minimum expenditure threshold of AED 5,000,000 (excluding tax) and defining minimum useful life periods: ten years for buildings and five years for all other assets. The Article clarifies that staged payments for construction, assembly or refurbishment can be aggregated to meet this threshold, ensuring large-scale projects are correctly classified.

Document Type: ERS - Executive Regulations
Law: VAT (FDL No 8 of 2017, as amended)
Decision Number: 52-article-57
Year: 2017
Country: 🇦🇪 UAE
Official Name: Article 57 - Assets Considered Capital Assets
Last updated at: 2025-12-26 14:13:51 UTC

Part 12 - Capital Asset Scheme

Article 57 - Assets Considered Capital Assets

  1. A Capital Asset is a single item of expenditure of the business amounting to AED 5,000,000 or more excluding the tax, on which tax is payable and which has estimated useful life equal or longer than:

    1. 10 years in case of a building or a part thereof.

    2. 5 years for all Capital Assets other than buildings or parts thereof.

  2. Items of stock, which are for resale, shall not be treated as capital assets.

  3. Expenditure consisting of smaller sums which collectively amount to AED 5,000,000 or more shall be treated as a single item of expenditure of AED 5,000,000 or more for the purposes of this Article where the sums are staged payments for any of the following:

    1. For the purchase of a building.

    2. For the construction of a building.

    3. In relation to an extension, refurbishment, renewal, fitting out, or other work undertaken to a building, except that where there is a distinct break between any such works being undertaken they shall be taken to be separate items of expenditure.

    4. For the purchase, construction, assembly or installation of any goods or immovable property where components are supplied separately for assembly.

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