The Ministry of Finance has issued Ministerial Decision No. 261 of 2024, which repeals the earlier Ministerial Decision No. 127 of 2023 and is effective retrospectively from June 1, 2023. This decision provides clarity on the tax treatment of Unincorporated Partnerships, Foreign Partnerships, and Family Foundations under the UAE Corporate Tax Law.

On 18^th November 2024, the Federal Tax Authority (FTA) published a Corporate Tax (CT) Guide on “Tax Procedures for Private Clarifications”, aiming to provide general guidance to taxpayers on when and how to file for a Private Clarification.

The objective of this guide is to provide clarity on ways and means to file a Private Clarification and in what circumstances a Private Clarification can be filed and rejected by the FTA.

The key highlights of the Guide are outlined below:

On 24 October 2024, the Federal Tax Authority (‘FTA’) published a Corporate Tax (‘CT’) Guide on “Real Estate Investment for Natural Persons”, aiming to provide general guidance on the taxation of Natural Persons in case of income from real estate investments under the Corporate Tax Law.

The objective of this guide is to provide clarity on taxation aspects with respect to what constitutes business income and what forms part of personal income from real estate investments.

The key highlights of the Guide are outlined below:

This guide addresses the tax implications for natural persons under Article 2(2)(c) of Cabinet Decision (‘CD’) No. 49 of 2023 in relation to Real Estate Investment and the income derived from it. Further, the CD defines Real Estate Investment as “Any investment activity conducted by a natural person related to, directly or indirectly, the sale, leasing, sub-leasing, and renting of land or real estate property in the State that is not conducted, or does not require to be conducted through a Licence from a Licensing Authority.” Accordingly, the gross amount of income, and related expenditure, derived by a natural person from Real Estate Investment is excluded from CT.

Natural persons shall be subject to CT only when the total Turnover derived from Business or Business Activities conducted by a natural person exceeds AED 1 million within a Gregorian calendar year.

Scope of Land or Real Estate Property

Real Estate means any of the following:

• Any area of land over which rights or interests or services can be created.
• Any building, structure or engineering work attached to the land permanently or attached to the seabed.
• Any fixture or equipment that makes up a permanent part of the land or is permanently attached to the building, structure or engineering work or attached to the seabed.

Real Estate property can include the following:

• Residential Property
• Furnished Holiday Homes
• Commercial Property
• Showrooms
• Warehouses and Storage Rooms
• Parking Lots and Garages, etc.

Further, Land can include any of the below:

• Agricultural Land
• Industrial Land
• Residential Land, etc.

Location of Land or Real Estate Property

The land or real estate property for investment purposes could be located in the UAE and/ or outside of the UAE.

Does Not Require to be Conducted through a Licence

• The phrase “required to be conducted” is to be understood covering the situation where a License is required but it has not been obtained. Accordingly, lack of a valid License does not mean that the investment activity will be outside the ambit of CT.
• Such activity would be considered a Business or Business Activity and the income derived from it would be subject to CT (subject to meeting the relevant Turnover threshold) even if the natural person does not have the required Licence.

Jointly Owned Land or Real Estate Property

• In the case of co-ownership of land or real estate property by multiple persons, the income derived from Real Estate Investment activity must be allocated to each owner.
• Where the owner is a natural person, their allocated income will be out of scope of CT if they do not conduct the Real Estate Investment activity through a Licence (or require a Licence to do so).

The Federal Tax Authority (FTA) has recently updated the Corporate Tax (CT) return form, particularly concerning the Transfer Pricing Disclosure Form (TP Disclosure Form). Now, taxable persons must disclose transactions with Related Parties and Connected Persons in the TP Disclosure Form. 

With the introduction of Corporate Tax in the UAE, the TP Disclosure Form is a crucial element of CT Returns. It ensures transparency in related party transactions and plays a significant role in determining a Taxable Person’s tax liabilities. 

It is worthwhile to note that it is an integral part of the CT Return process and these additional details are considered as part of the TP disclosure form.  It is not a separate stand-alone form to be filled and filed but one of the segments/components of the CT return form. 

In the TP Disclosure form, FTA seeks the following information to be provided by the Taxpayer:

With the Introduction of Federal UAE CT Law, the UNITED ARAB EMIRATES MINISTRY OF FINANCE issued Ministerial Decree No. (239) of 2023 on the Reconstitution of the Standing Committee to Follow Up the Implementation of Economic Substance Requirements

Consequently, The Ministry of Finance, with the approval of council of ministers have issued Cabinet Resolution No. (98) of 2024 (the resolution) amending some provisions of Cabinet Resolution No. (57) of 2020 concerning the Determination of Economic Substance Requirements – The Economic Substance Regulations

On 26 September 2024, the Federal Tax Authority (FTA) released decision no.7 of 2024 stating the Postponement of the Deadline to File a Corporate Tax Return and Settle the Corporate Tax Payable for Certain Tax Periods for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and its amendments.

This decision states that the deadline to file the Corporate Tax Return and settle the Corporate Tax liability has been extended to 31 December 2024 subject to the fulfillment of all the following conditions :

• Entities that are incorporated, established or recognised on or after June 2023 and
• Entities have a tax period ending on or before 29 February 2024.

Don’t miss this critical deadline. Ensure compliance and avoid penalties by filing and settling your Taxes on time. Act now to avoid last-minute stress!

In conclusion, businesses meeting the criteria must ensure they file their Corporate Tax Return and settle liabilities by 31 December 2024. This extension highlights the importance of timely Corporate Tax Registration through the EmaraTax portal to avoid penalties and ensure compliance with the Federal Tax Authority’s requirements.

The decision outlines specific circumstances under which the FTA will refund fees for private clarification requests: 

1. Withdrawal of request Within Two Days: If the applicant withdraws their private clarification request within two business days of submission, they will be eligible for a refund. 
2. Persons not registered under the Corporate Tax: Private Clarification Requests submitted by individuals or entities not registered under the corporate tax and requests are not related to the inquiry about tax registration. 
3. Tax Audits: Applicants undergoing a tax audit at the time of submitting the private clarification request will receive a refund. 
4. Post-Decision Procedures: Private clarification requests are related to the decision issued by the FTA after submitting the request. 
5. Duplicate Requests: If the duplicate private clarification request is submitted by the same applicant on the same subject, the fee will be refunded. 
6. Legislative Review: If the private clarification requests are related to the subjects under review for legislative amendment in coordination with the Ministry of Finance (MoF) will qualify for refunds. 

Non-Muslim expatriates may register their Wills with the Dubai Courts Notary if they wish their Will to be governed under the Civil Law Jurisdiction of Dubai. The Will shall be drafted in the Arabic language by a sworn translator. The Will ensures that Shariah law is not applicable and the testator has the right to distribute their assets in any manner they wish. Estate to be distributed can be anywhere across the seven Emirates in the UAE. It is pertinent to note that Dubai Courts Notary Will also provides for guardianship of minor children in the event of the demise of either one or both parents/caregiver(s). 

Qualifying Public benefit entities (QPBE) are those entities which are established and operated exclusively for any of the following activities:  

Similar to a company, a Foundation possesses its own legal personality, allowing it to enter into contracts and hold property. However, a key distinction lies in its purpose. A Foundation is not driven by shareholder interests or profit generation. It lacks the ability to issue shares or engage in commercial activities beyond those directly supporting its stated objectives. 

The core of a Foundation revolves around its objects, which define its purpose(s) and may identify specific Beneficiaries. These objects, along with the Founder’s wishes, are enshrined in the Foundation’s Charter and By-laws, serving as the Foundation’s guiding constitution. Management is entrusted to a Council, mirroring the structure of a company board with its Council Members. Such foundations governed by the DIFC Foundations Law of 2018 are referred as DIFC foundations.

Foundations offer a versatile tool for a variety of applications: