Latest news with #LimitedPartnerships
Zawya
11-04-2025
- Business
- Zawya
UAE Cabinet issues decision on non-residence's nexus linked to corporate tax law
UAE – The UAE Ministry of Finance has announced a new decision that specifies the cases in which a non-resident juridical investor in a Qualifying Investment Fund (QIF) or Real Estate Investment Trust (REIT) is considered to have a nexus and is therefore subject to taxation. The Cabinet issued Decision No. 35 of 2025 on the Determination of a Non-Resident Person's Nexus in the State for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses which replaces the provisions of Cabinet Decision No. 56 of 2023, according to an official statement. This follows the issuance of Cabinet Decision No. 34 of 2025 on Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Under the new decision, a nexus for a non-resident juridical investor in a QIF that breaches the real estate threshold will arise either on the date of the dividend distribution if the QIF distributes 80% or more of its income within nine months from its financial year-end, or the date the ownership interest is acquired, in the case where the QIF fails to distribute at least 80% of its income within nine months from its financial year-end. A nexus will also be created for a non-resident juridical investor in a QIF that fails to meet the diversity of ownership conditions in the tax period in which the failure occurs. Furthermore, a nexus for a non-resident juridical investor in a REIT will arise either on the date of the dividend distribution if the REIT distributes 80% or more of its income within nine months from its financial year-end, or the date the ownership interest is acquired, in the case where the REIT fails to distribute at least 80% of its income within nine months from its financial year-end. Other than the above cases, non-resident juridical investors investing exclusively in a QIF and/or REIT will not be considered to have a taxable presence in the UAE. This decision reduces foreign investors' compliance burdens and reflects the UAE government's commitment to providing an attractive investment environment for such investors. Earlier in 2025, the UAE finance ministry announced a decree covering the introduction of the top-up tax for multinational enterprises, providing further details on the UAE Domestic Minimum Top-up Tax (UAE DMTT). Source: Mubasher
Zawya
06-04-2025
- Business
- Zawya
MoF announces the issuance of Cabinet Decision on Determining a Non-Resident Person's Nexus in the UAE
UAE – The Ministry of Finance has announced the issuance of Cabinet Decision No. 35 of 2025 on the Determination of a Non-Resident Person's Nexus in the State for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses which replaces the provisions of Cabinet Decision No. 56 of 2023. The new decision specifies the cases in which a non-resident juridical investor in a Qualifying Investment Fund (QIF) or Real Estate Investment Trust (REIT) is considered to have a nexus in the UAE and is therefore subject to taxation. This follows the issuance of Cabinet Decision No. 34 of 2025 on Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Under the new decision, a nexus for a non-resident juridical investor in a QIF that breaches the real estate threshold will arise either on the date of the dividend distribution if the QIF distributes 80% or more of its income within nine months from its financial year-end, or the date the ownership interest is acquired, in the case where the QIF fails to distribute at least 80% of its income within nine months from its financial year-end. A nexus will also be created for a non-resident juridical investor in a QIF that fails to meet the diversity of ownership conditions in the tax period in which the failure occurs. A nexus for a non-resident juridical investor in a REIT will arise either on the date of the dividend distribution if the REIT distributes 80% or more of its income within nine months from its financial year-end, or the date the ownership interest is acquired, in the case where the REIT fails to distribute at least 80% of its income within nine months from its financial year-end. Other than the above cases, non-resident juridical investors investing exclusively in a QIF and/or REIT will not be considered to have a taxable presence in the UAE. This decision reduces foreign investors' compliance burdens and reflects the UAE government's commitment to providing an attractive investment environment for such investors.
Zawya
05-04-2025
- Business
- Zawya
MoF announces the issuance of a cabinet decision on qualifying investment funds and qualifying limited partnerships
UAE – As part of its continuous efforts to enhance the investment environment in the United Arab Emirates, the Ministry of Finance has announced the issuance of Cabinet Decision No. 34 of 2025 on Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which replaces the provisions of Cabinet Decision No. 81 of 2023. The new decision aims to attract more investments and promote the growth of the national economy. Preferential Tax Treatment Among the most significant provisions of the new decision is the introduction of a favourable tax treatment, ensuring that investors deriving income from a Qualifying Investment Fund will not be subject to UAE Corporate Tax on the income derived through the fund, provided that the real estate asset threshold (10%) or the diversity of ownership conditions are not breached. Flexibility Additionally, the new decision offers greater flexibility, granting QIFs a grace period even after the first two years of establishment. This grace period allows them to remedy any breaches of the diversity of ownership requirements, provided such breaches do not exceed an aggregate of ninety days in a year or if they occur during the liquidation or termination of the fund. Fairness Further enhancing the tax framework, the new decision stipulates that any breaches of the diversity of ownership requirements will only impact the investors responsible for the breach and will not disqualify the overall fund as a QIF, provided that the relevant exemption conditions are met. Furthermore, any breach of the real estate asset threshold for a QIF will result in only 80% of the real estate income derived through the fund being subject to UAE Corporate Tax. Similarly, investors in a Real Estate Investment Trust (REIT) will only be subject to tax on 80% of the real estate income derived through the REIT. This aligns with the regulatory distribution requirements applicable to REITs in the UAE, ensuring consistency across tax and regulatory frameworks. Ease of Administration Foreign juridical investors in REITs and QIFs (that meet the relevant conditions) that distribute 80% or more of their income within nine months of the financial year-end are only required to register for Corporate Tax on the date of the dividend distribution. This streamlines compliance procedures and reduces administrative burdens for foreign investors. International Best Practice Lastly, the new decision introduces a new provision allowing certain limited partnerships to qualify for effective tax-transparent status, provided that they meet the necessary conditions. This ensures that the UAE promotes global best practice for the taxation of such specific partnership structures. The decision reflects the UAE government's commitment to providing an attractive investment environment that is flexible and simplifies compliance requirements for investors, thereby maintaining the UAE's status as a leading investment hub.
Al Etihad
05-04-2025
- Business
- Al Etihad
MoF announces issuance of Cabinet Decision on Qualifying Investment Funds and Qualifying Limited Partnerships for Corporate Tax Law
5 Apr 2025 14:33 ABU DHABI (ALETIHAD)The Ministry of Finance (MoF) has announced the issuance of Cabinet Decision No. 34 of 2025 on Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which replaces the provisions of Cabinet Decision No. 81 of 2023. The new decision aims to attract more investments and promote the growth of the national economy. Preferential Tax Treatment Among the most significant provisions of the new decision is the introduction of favourable tax treatment, ensuring that investors deriving income from a Qualifying Investment Fund will not be subject to UAE Corporate Tax on the income derived through the fund, provided that the real estate asset threshold (10%) or the diversity of ownership conditions are not breached. Greater Flexibility Additionally, the new decision offers greater flexibility, granting QIFs a grace period even after the first two years of establishment. This grace period allows them to remedy any breaches of the diversity of ownership requirements, provided such breaches do not exceed an aggregate of ninety days in a year or if they occur during the liquidation or termination of the fund. Fairness Further enhancing the tax framework, the new decision stipulates that any breaches of the diversity of ownership requirements will only impact the investors responsible for the breach and will not disqualify the overall fund as a QIF, provided that the relevant exemption conditions are met. Furthermore, any breach of the real estate asset threshold for a QIF will result in only 80% of the real estate income derived through the fund being subject to UAE Corporate Tax. Similarly, investors in a Real Estate Investment Trust (REIT) will only be subject to tax on 80% of the real estate income derived through the REIT. This aligns with the regulatory distribution requirements applicable to REITs in the UAE, ensuring consistency across tax and regulatory frameworks. Ease of Administration Foreign juridical investors in REITs and QIFs (that meet the relevant conditions) that distribute 80% or more of their income within nine months of the financial year-end are only required to register for Corporate Tax on the date of the dividend distribution. This streamlines compliance procedures and reduces administrative burdens for foreign investors. International Best Practice Lastly, the new decision introduces a new provision allowing certain limited partnerships to qualify for effective tax-transparent status, provided that they meet the necessary conditions. This ensures that the UAE promotes global best practices for the taxation of such specific partnership structures. The decision reflects the UAE government's commitment to providing an attractive investment environment that is flexible and simplifies compliance requirements for investors, thereby maintaining the UAE's status as a leading investment hub. Source: Aletihad - Abu Dhabi
