Amended Legislation Announced in the UAE

The UAE Ministry of Finance recently announced legislation changes that introduce a series of administrative and tax relief measures for domestic businesses, foreign partnerships, and family foundations. Overall the changes aim to reduce the administrative burden and simplify compliance for certain structures and entities within the region. The amendments will be applied retrospectively for tax years commencing on or after 1 June 2023.

In summary the key changes are:

1. Unincorporated partnerships

Removal of the requirement to notify the Federal Tax Authority (FTA) within 20 business days of any changes to partner composition such as a change in council members.

2. Foreign partnerships

Foreign partnerships operating in the UAE will now be treated as tax transparent if they hold this status in their home jurisdiction. Individual partners will no longer have to verify their tax status with the FTA but will automatically be recognised according to their home jurisdiction classification.

3. Family foundations

Juridical persons wholly owned and controlled by a family foundation can now apply for tax transparent status in the UAE. Juridical persons include prescribed companies, holding companies and other recognised entities. This aligns tax benefits for family foundations with broader UAE corporate tax.

These latest amendments demonstrate the UAE’s commitment to maintaining a business-friendly environment and to creating new opportunities for organisations to succeed in the region. They will ensure that the UAE maintains its position as a leading international finance centre, offering straightforward and effective solutions for individuals and families to structure their family wealth in line with their succession planning needs.

As stated by HE Younis Haji AlKhoori, Undersecretary of the Ministry of Finance:

“The amendment reflects the UAE’s Corporate Tax regime flexibility to provide certainty to taxable persons and sustain confidence in the UAE’s competitive business environment. 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”.

Should you wish to discuss our services within the UAE please contact Alia Haskouri directly.

JTC Services in the UAE

JTC offers a complete range of services to both private and corporate client needs in the Emirates – from working with advisors to implement the most appropriate type of entity and jurisdictions for your set-up, to on-going management, accounting, corporate governance and payroll.

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