Corporate Tax


Ministerial Decision No. 126 of 2023 on the General Interest Deduction Limitation Rule

This Ministerial Decision amplifies the provisions relating to taxability of an Unincorporated Partnership and for it to be treated as a separate Taxable Person, as well as provisions relating to Foreign Partnership and Family Foundation being treated as an Unincorporated Partnership under the Federal Decree-Law No. 47 of 2022.
The relevant provisions / clarifications provided vide the Decision are as follows:

Unincorporated Partnership

Shall be regarded as a pass-through for the purpose of UAE CT Law provided it is
not a juridical person

Unincorporated Partnership which has applied for being treated as separate Taxable Person

Application shall be irrevocable, except under exceptional circumstances and
subject to FTA approval.


Notification to FTA within 20 business days of any Partner joining or leaving the
Unincorporated Partnership

Foreign Partnership – additional conditions for being treated as an Unincorporated Partnership

Annual declaration to FTA for satisfaction of conditions – procedure and timeline
to be prescribed

Adequate arrangement should exist for exchange of information with the Foreign

Each Partner should be subject to tax on distributive share in their resident
Partnership jurisdiction

Family Foundation – meeting one of the two additional conditions for being treated as an Unincorporated Partnership

In case of a public benefit entity being a beneficiary, such beneficiary does not
conduct any activity which derives Taxable Income; or

Where any Taxable Income is derived, the same should be distributed to the
beneficiary within 6 months following the Tax Period

This Ministerial Decision clarifies certain provisions relating to pass-through status of Unincorporated Partnerships, Foreign Partnership and Family Foundation and shall be important while determining the applicability of UAE Corporate Tax provision in case of these categories of persons.

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