The UAE Ministry of Finance has introduced a series of administrative and tax relief measures for domestic businesses, foreign partnerships, and family foundations.
The amendments will apply for all tax periods starting on or after June 1, 2023, and have been made to align with the latest Federal Decree-Law on Corporate Taxation.
The updated Ministerial Decision primarily reduces compliance requirements for unincorporated partnerships by eliminating the obligation to notify the Federal Tax Authority (FTA) within 20 business days of any changes to partnership composition, such as new partners joining or existing partners departing.
Additionally, it clarifies that foreign partnerships will be treated as tax transparent in the UAE if they are treated as such in their home jurisdiction, thus removing the need for individual partners to separately verify their tax status to the FTA.
The Decision also grants a juridical person within a family foundation the option to apply for tax transparent status. This measure enhances tax advantages for family foundations holding assets within the UAE.
“The amendment to this decision reflects the UAE’s Corporate Tax regime flexibility to provide certainty to taxable persons and sustain confidence in the UAE’s competitive business environment,” said Younis Haji AlKhoori, Under-Secretary of the Ministry of Finance. “Specifically, this approach aims to ease compliance burdens on taxpayers and to reinforce the UAE’s position as a leading global hub for business and investment”.
