UAE Corporate Tax Compliance requirements for Unincorporated Partnerships, Foreign Partnerships and Family Foundations

13 June 2025 – On 10 June 2025, the Federal Tax Authority (FTA) of the United Arab Emirates (UAE) published FTA Decision No. 5 of 2025 (Decision) on Corporate Tax (CT) compliance requirements for ‘Unincorporated Partnerships (UP), Foreign Partnerships and Family Foundations for the purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses’.

The Decision repeals the previously issued Decision No. 16 of 2023 and is enacted with effect from 1 July 2025.

In this alert, we have summarized below the clarification/changes brought in through the new published Decision.

1- CT registration requirements for UP

The Decision aligns the CT registration requirements for UP, as outlined in the earlier FTA Decision No. 16. However, this Decision specifies deadline for the submission of CT registration for the UP.

Partners in a fiscally transparent UP must appoint one partner as the authorized representative. This representative will be responsible for submitting the CT registration application for the UP to the FTA according to the timelines outlined below:

2- Annual declaration obligation for UP

• The Decision requires that the annual declaration, containing necessary information for determining taxable income for the partners, must be submitted within 9 months from end of the relevant financial year of the UP. The financial year of the UP may either follow the Gregorian calendar year or align with the usual financial year for which the financial statements are prepared by the UP.
• Additionally, the Decision grants an extension for submitting this declaration for UPs whose financial period ended on or before 31 March 2025, with the extended deadline set at 31 December 2025.

3 -  Application for UP to be treated as taxable person

• The Clause 8 of Article 16 of the CT Law provides an option for a UP to be regarded as a taxable person in its own right by filing an application with the FTA. However, the deadline was not specified in the CT Law or earlier issued decisions.
• The Decision specifies a deadline that such application must be submitted before the end of the relevant financial year of the UP. 
• Once the application is approved by the FTA, the UP shall be treated as a taxable person effective from either the start of the tax period in which the application is submitted or from the start of the next tax period, as specified in the application. The Ministry of Finance (MoF)'s recently issued Cabinet Decision No. 63 of 2025 further clarifies that once the application is accepted, the UP will be considered a resident person and a juridical person for UAE CT purposes.
• Furthermore, the Decision provides a filing extension, specifying that if the application is submitted on or before 31 December 2025, the FTA may approve it effective from the commencement of any tax period ending on or before 31 December 2025, as indicated in the application.

4-   CT return filing and tax payment deadline for a UP that is treated as taxable person

• According to Clause 1 of Article 53 and Article 48 of the CT Law, a taxable person must file a CT return and make the tax payment within 9 months from the end of the relevant financial year.
• However, the Decision extends the deadline for filing the CT return and making the tax payment to 31 December 2025 for UPs for tax periods ended on or before 31 March 2025.

5- Foreign partnership that is treated as UP

• According to the MoF’s Ministerial Decision (MD) No. 261 of 2024, a foreign partnership that satisfies conditions for a UP (i.e., the foreign partnership is not subject to CT or of a nature similar to CT) is required to file an annual declaration with the FTA confirming meeting the UP conditions.
• The Decision clarifies that a partner of the UP will submit this annual declaration on behalf of the UP when filing their tax return. 
• Consequently, it appears that the UP is not required to file a separate declaration, instead, the declaration will be included in the partner’s CT return

6- Distributive shares of partners in UP

• Generally, the distributive shares of partners are specified in the partnership agreement. However, if the distributive share of the partners cannot be identified, the Decision clarifies that the assets, liabilities, income, and expenditure of the UP shall be allocated equally to each partner in the UP.
• This clarification was previously included in FTA Decision 16 of 2023 and is therefore being carried forward under this new decision

7-  Timeline for tax deregistration applications for UP

• The Decision stipulates that in the event of dissolution, the authorized partner of a UP must file a CT deregistration application within three months from the date of cessation of business activities.

8- Application deadline for family foundation to be treated as UP

• According to Clause 2 of Article 17 of the CT Law read with the MoF’s MD No. 261 of 2024, a family foundation that is a juridical person, or a juridical person that is wholly owned and controlled by a family foundation may make an application to be treated as an UP after meeting the specified conditions.
• The Decision specifies that such an application must be submitted before the end of the relevant tax period. Once the application is accepted, the family foundation or the juridical person wholly owned and controlled by a family foundation shall be treated as an UP effective from the start of the tax period in which the application is made, or from the start of the next tax period, as specified in the application approval.
• The Decision also provides an extension, stating that if an application is made by 31 December 2025, the FTA may approve the application effective from the beginning of any tax period ending on or before 31 December 2025, as specified in the application.

9- Annual confirmation of family foundation

• A family foundation, or a juridical person wholly owned and controlled by a family foundation, that has applied to be treated as an UP, is required to file an annual confirmation within 9 months from the end of the relevant tax period, confirming continued compliance with the conditions listed under Clause 1 of Article 17 of the CT Law. 
• For tax periods that ended on or before 31 March 2025, the deadline for submitting this annual confirmation is 31 December 2025.

Notice

The above is only a brief summary of the current update, is valid at the time of circulation and is based only on information currently available in the public domain which is subject to change. This alert has been written in general terms and does not constitute any form of advice or recommendation by Deloitte and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we highly recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Deloitte accepts no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication.

Deloitte and Touche Middle East would be pleased to advise readers on how to apply the principles set out in this publication to their specific circumstances.