UAE eases tax rules for partnerships, family foundations

The UAE Ministry of Finance announced amendments to Ministerial Decision No. (261) of 2024, covering Unincorporated Partnerships, Foreign Partnerships, and Family Foundations under Federal Decree-Law No. 47 of 2022 on Corporate and Business Taxation.

The updated decision simplifies compliance for unincorporated partnerships by removing the requirement to notify the Federal Tax Authority (FTA) within 20 business days of changes in partnership composition, such as adding or removing partners, according to a press release.

“These amendments showcase the UAE’s flexible Corporate Tax regime, providing clarity for taxable entities while strengthening confidence in the nation’s competitive business environment. The goal is to ease compliance burdens and solidify the UAE’s status as a global business and investment hub,” said Younis Haji AlKhoori, Undersecretary of the Ministry of Finance.

Effective for tax periods starting on or after June 1, 2023, the revised decision introduces administrative and tax relief measures benefiting domestic businesses, foreign partnerships, and family foundations.

It also allows juridical persons within family foundations to apply for tax-transparent status, enhancing tax benefits for foundations holding assets within the UAE. “This aligns family foundation advantages with the UAE Corporate Tax framework,” the press release added.