the UAE Ministry of Finance issued a Cabinet Decision introducing a new tax treatment option for non-partnerships before learning interaction.
The step is about the continued effort by the government to develop tax transparency and improve business environment.
Under Federal Decree-Law No. (47) in 2022 in taxation of corporations and businesses, unchanged associations are considered transparent entities.
The UAE’s Against Practices Financial Desces Cabinti Determination of Partnership Tax Tax
This means that the association itself is not subject to corporate tax, but partners each of each of their partial interaction segments.
However, “the law also provides an option for applying for partnerships for cooperation to treat as a taxable person, similar to any other legal entity,” according to a statement on Emirates News Agency (WAM) Speaking of the ministry notice.
The new Cabinet Decision gives anonymous partnership with the option, subject to the approval of the Federal Tax Authority (FTA), to be identified as a taxable person.
“To approve the application of partners, the uncorneated partnership will be considered a legal person and a resident person for the tax purpose,” in addition to the statement.
This change means the partnership receives the same tax treatment such as other legal persons under the law.
The decision represents the rules for verifying income of non-uninincorated associations to ensure the clarity and security of following tax.
According to the ministry, this step refers to the development of tax neutrality. It allows non-hidden equations to access exceptions and reliefs available to legal persons under corporate tax law.
The decision is expected to help streamline the tax framework for associated taxes as an entity, instead of their fellow taxes each.
