The UAE Ministry of Finance (MoF) has announced amendments to Ministerial Decision No. (261) of 2024, targeting Unincorporated Partnerships, Foreign Partnerships, and Family Foundations under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
These amendments, effective for tax periods starting on or after 1 June 2023, aim to simplify compliance processes and enhance tax advantages for domestic and international entities.
Key Amendments and Relief Measures:
- Eased Compliance for Unincorporated Partnerships
The revised decision eliminates the obligation for unincorporated partnerships to notify the Federal Tax Authority (FTA) within 20 business days of changes in partnership composition, such as adding or removing partners. This reduces administrative burdens and promotes operational efficiency for domestic businesses. - Simplified Tax Status for Foreign Partnerships
Foreign partnerships will now be considered tax transparent in the UAE if they hold the same status in their home jurisdictions. This clarification removes the need for individual partners to independently verify their tax status with the FTA, streamlining compliance for international partnerships. - Tax Advantages for Family Foundations
Juridical persons within family foundations can now apply for tax transparent status. This adjustment aligns family foundations with the UAE Corporate Tax framework, providing them with enhanced tax benefits for assets held within the country. The move underscores the UAE's commitment to supporting family businesses and strengthening their financial sustainability.
Younis Haji AlKhoori, Under-Secretary of the Ministry of Finance, highlighted that the amendments reflect the flexibility of the UAE's Corporate Tax regime. By easing compliance requirements and offering clearer guidelines, the changes aim to reinforce the UAE’s reputation as a global business hub and attract further investment.
These measures not only simplify tax processes but also reaffirm the UAE's commitment to fostering a competitive, business-friendly environment. The alignment of taxation policies with international standards ensures the country remains a leading destination for global partnerships, family enterprises, and investments.
News Source: Emirates News Agency
