UAE Updates Corporate Tax Rules for Partnerships & Family Foundations

The UAE Ministry of Finance has issued Ministerial Decision No. 261 of 2024, clarifying the treatment of Unincorporated Partnerships, Foreign Partnerships, and Family Foundations under the Corporate Tax Law (Federal Decree-Law No. 47 of 2022). 

Unincorporated Partnerships – Not considered taxable unless they are juridical persons. However, they can opt to be taxed as a separate entity, subject to approval. 

Foreign Partnerships – Must submit annual declarations to confirm tax status in their home jurisdiction. 

Family Foundations – Can be treated as Unincorporated Partnerships if they meet conditions related to income distribution and public benefit entities. 

The decision also repeals Ministerial Decision No. 127 of 2023 and takes effect from June 1, 2023. 

These updates provide greater clarity and flexibility for businesses structuring partnerships in the UAE. 

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