UAE announces new tax rules for partnerships and family foundations
- 04 Nov, 2025
UAE announces new tax rules for partnerships and family foundations
The UAE has introduced updated rules on how tax-transparent entities are treated, bringing key changes for partnerships, foreign partnerships, and family foundations.
Under Ministerial Decision No. 261 of 2024, family foundations can now apply to be classified as Unincorporated Partnerships for corporate tax purposes. In simple terms, this allows the foundation to be treated as tax-transparent, meaning the tax responsibility shifts to its beneficiaries rather than the entity itself.
How the new process works
Family foundations seeking this status must submit an application to the Federal Tax Authority through the EmaraTax platform. The application can be filed by the taxpayer, their tax agent or a legal representative.
To qualify, the foundation must:
• Register for corporate tax on EmaraTax
• Apply for Unincorporated Partnership status after registration
• Complete a self-declaration confirming compliance with Article 17 of the Corporate Tax Law
Once approved, the family foundation will no longer file corporate tax returns. It will, however, need to submit an annual declaration to the FTA. Details of that declaration are expected to be published soon.
Tax-transparent treatment can also be extended to non-operating subsidiaries fully owned and controlled by the family foundation, using the same process.
What this means for beneficiaries
If beneficiaries are natural persons, they will need to determine whether they must register for corporate tax and submit their own returns for the relevant tax periods.
For full conditions and guidance, the FTA website offers detailed reference materials and legislation updates.
This decision reinforces the UAE’s ongoing efforts to create clarity around its corporate tax framework and support structured family wealth planning.
