Legislation Details
- Full Title: Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses
- Law Type: Federal Decree-Law
- Law Number: [no number] of 2025
- Issued Date: 27 Mar 2025
- Effective Date: 27 Mar 2025
- Official Gazette: No. 796
- Sector: Tax
- Status: Active
- Number of Articles: 43
- Chapters/Parts: 0
- Amendments: 0
Summary
This Cabinet Resolution establishes the conditions for investment funds and limited partnerships to qualify for exemption from corporate tax under the Federal Decree-Law on Taxation of Corporations and Businesses. It defines key terms such as "Investment Business", "Immovable Property", and "Real Estate Investment Trust", and sets out the specific requirements for investment funds and real estate investment trusts to be considered "Qualifying" for tax exemption purposes. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025) The Resolution is important for businesses and investors in the UAE, as it provides clarity on the tax treatment of various investment vehicles. By meeting the specified conditions, qualifying investment funds and real estate investment trusts can be exempt from corporate tax, which can significantly impact their financial performance and attractiveness to investors. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
What is the scope and purpose of this law?
The scope of this Cabinet Resolution is to define the conditions for investment funds and limited partnerships to qualify for exemption from corporate tax under the Federal Decree-Law on Taxation of Corporations and Businesses. It applies to "Qualifying Investment Funds" and "Qualifying Limited Partnerships" that meet the specified criteria. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1-5) The purpose of the Resolution is to provide a regulatory framework for the tax treatment of these investment vehicles, with the aim of promoting investment and economic activity in the UAE. By establishing clear requirements for tax exemption, the Resolution seeks to create a favorable environment for the establishment and operation of qualifying investment funds and limited partnerships. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
What are the key definitions under this law?
The Resolution provides the following key definitions:
- Investment Business: The business or business activity of issuing investment interests, pooling investor funds, or establishing a mutual fund to enable investors to benefit from profits or returns from investments. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1)
- Immovable Property: Any plot of land, building, structure, engineering works, fixtures, or equipment permanently attached to land or seabed. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1)
- Income from Immovable Property: The net profit from rights in rem in immovable property located in the UAE, including from sale, disposal, leasing, or other exploitation. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1)
- Immovable Property Ratio: The value of immovable property located in the UAE held by a Qualifying Investment Fund as a percentage of the total value of the Fund's assets. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1)
- Real Estate Investment Trust (REIT): A term defined in the relevant legislation in force in the UAE. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1)
- Net Profit: The net profit recorded in the financial statements under the arm's-length principle, allocated in proportion to the investor's ownership interest. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1)
- Qualifying Limited Partnership: A limited partnership with legal personality established under the relevant legislation in force in the UAE solely for collective investment. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1)
What are the main obligations and requirements?
The Resolution imposes the following key obligations and requirements: 1. Investment Funds, except for Real Estate Investment Trusts, must meet the following conditions to qualify for corporate tax exemption: a. The primary business must be investment business, with any other activities being ancillary or incidental. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 2(1)(a)) b. Investors must not control the daily management of the Investment Fund. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 2(1)(b)) c. The Fund must provide investors with information, documents, and data necessary for calculating their taxable income. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 2(1)(c)) 2. Real Estate Investment Trusts must meet additional conditions to qualify for corporate tax exemption, including having a minimum value of immovable property and meeting certain ownership or trading requirements. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 4) 3. Qualifying Limited Partnerships must be established under the relevant UAE legislation solely for collective investment. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 1, 5)
What licensing, registration, or approval requirements exist?
The Resolution does not specify any licensing, registration, or approval requirements for Qualifying Investment Funds or Qualifying Limited Partnerships. It only states that they must meet the conditions outlined in the Resolution to be eligible for corporate tax exemption. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
What rights and protections does this law provide?
The Resolution does not explicitly grant any specific rights or protections to investors, businesses, or other parties. Its primary focus is on establishing the conditions for investment funds and limited partnerships to qualify for corporate tax exemption. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
Which authorities or bodies are responsible for enforcement?
The Resolution does not specify any authorities or bodies responsible for the enforcement of its provisions. It only states that Qualifying Investment Funds and Qualifying Limited Partnerships must "apply to the Authority" for exemption from corporate tax. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 2(1), Art. 4(1))
What are the penalties for non-compliance?
The Resolution does not specify any penalties for non-compliance with its provisions. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
What fees, charges, or financial provisions are specified?
The Resolution does not mention any fees, charges, or other financial provisions. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
What exemptions or exceptions apply?
The Resolution provides the following exemptions and exceptions: 1. Investment Funds, except for Real Estate Investment Trusts, that meet the specified conditions are eligible for exemption from corporate tax. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 2) 2. Real Estate Investment Trusts that meet the specified conditions are eligible for exemption from corporate tax. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 4) 3. The Resolution does not apply any exemptions or exceptions to Qualifying Limited Partnerships. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 5)
How are disputes resolved under this law?
The Resolution does not specify any dispute resolution mechanisms or procedures. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
What are the key deadlines and time limits?
The Resolution includes the following key deadlines and time limits: 1. Qualifying Investment Funds are exempt from the thresholds set out in Article 3(2) for the first two fiscal years after their establishment, provided there is sufficient evidence of the Fund's intention not to exceed the thresholds. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 3(3)) 2. Qualifying Investment Funds that distribute 80% or more of their income from immovable property to investors within 9 months after the end of the fiscal year are not subject to the adjustment provisions in Article 3(5). (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Art. 3(6))
How does this law interact with other UAE legislation?
The Resolution references the following related UAE legislation: - Federal Decree by Law No. (28) of 2022 Regarding Tax Procedures - Federal Decree by Law No. (47) of 2022 Regarding Taxation of Corporations and Businesses - Cabinet Resolution No. (81) of 2023 Regarding the conditions for Qualifying Investment Funds The Resolution defines terms and sets out conditions for investment funds and limited partnerships to qualify for corporate tax exemption under the Federal Decree-Law on Taxation of Corporations and Businesses. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025)
When did this law come into effect?
The Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses was issued on 27 March 2025 and came into effect on the same date. (Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses, 2025, Issued Date, Effective Date)
Source Documents
This article analyses Cabinet Resolution Regarding Qualifying Investment Funds and Qualifying Limited Partnerships for the Purposes of Federal Decree by Law Regarding Taxation of Corporations and Businesses for legal research and educational purposes. For the purpose of interpretation and application, reference must be made to the original Arabic text. In case of conflict, the Arabic text prevails. This does not constitute legal advice.