UAE Ministerial Decision No. 127 of 2023 on Unincorporated Partnership

The Ministry of Finance (MoF) has issued Ministerial Decision No. 127 of 2023 on Unincorporated Partnership specifying additional conditions under which a foreign partnership and family foundation shall be treated as an Unincorporated Partnership for the purpose of Corporate Tax Law.

Some of the key highlights of the decision:

• Where an Unincorporated Partnership elects to be treated as Taxable Person in its own right, the application once approved is irrevocable, and any change in the composition of the partnership must be notified to the Federal Tax Authority within 20 business days.
• A Foreign Partnership that is treated as an Unincorporated Partnership must submit an annual declaration confirming that it is not taxed under foreign jurisdiction laws, and each partner is taxed individually based on their share of income.
• A Family Foundation to be treated as an Unincorporated Partnership where one or more of its beneficiaries are public benefit entities. Further, it must confirm that either the public benefit entity does not derive income treated as Taxable Income, or, if they do, that such income is distributed to the respective beneficiaries within six (6) months from the end of the relevant Tax Period.