ARTICLE
16 June 2025

FTA Issues New Decision Clarifying Compliance Requirements For Unincorporated Partnerships, Foreign Partnerships & Family Foundations

Nexdigm UAE

Contributor

Professional Services that help companies navigate challenges across all stages of their life-cycle. Through our direct operations in the USA, Poland, UAE, and India, we serve a diverse range of clients, spanning multinationals, listed companies, privately-owned companies, and family-owned businesses from over 50 countries. Nexdigm is an employee-owned, privately held, independent global organization that helps companies across geographies meet the needs of a dynamic business environment. Our focus on problem-solving, supported by our multifunctional expertise enables us to provide customized solutions for our clients.
On 19 May 2025, the UAE Federal Tax Authority (FTA) issued Decision No. 5 of 2025, outlining new compliance requirements for:
United Arab Emirates Tax

On 19 May 2025, the UAE Federal Tax Authority (FTA) issued Decision No. 5 of 2025, outlining new compliance requirements for:

  • Unincorporated Partnerships
  • Foreign Partnerships
  • Family Foundations

This decision clarifies how these entities should handle corporate tax registration, declarations, tax filing, and other compliances.

Requirement for Unincorporated Partnerships Deadline Comments
Corporate Tax Registration Application
  • Unincorporated Partnerships are not treated as taxable persons in their own rights, and are required to appoint one of the partners to act as an authorised partner.
  • Such authorised partners are required to submit application for registering the Unincorporated Partnership.
First financial year ending before 1 July 2025 31 August 2025
First financial year ending after 1 July 2025 Within 3 months from the end of the financial year
Annual Declaration Filing
  • To be filed by an authorised partner.
  • Breakdown of income, assets, liabilities and expense allocations to partners.
  • If profit-sharing arrangement is not defined/unclear, income, expense, asset and liability are to be divided equally.
  • A UAE-based partner (who is a taxable person) in a Foreign Partnership must file an annual declaration on behalf of the partnership when submitting their own tax return.
For financial year ending on or before 31 March 2025 31 December 2025
For others Within 9 months from the end of the financial year
Tax De-registration Application Within 3 months from the date of cessation of the Business or Business Activity Reason could be due to a dissolution or termination of the business, or any other valid reasons.
Application to be elected as a Taxable Person Optional application
Any Tax Period ending on or before 31 December 2025 On or before 31 December 2025
For others Before end of the financial year
Tax Return Filing and Corporate Tax payment for periods ending on or before 31 March 2025 31 December 2025
  • Only for Unincorporated Partnerships that are to be treated as Taxable Persons.
  • For subsequent periods, the standard timeline of 9 months from the end of financial year would apply after 31 March 2025

The decision provides additional clarity, stating that a Family Foundation seeking to be treated as an Unincorporated Partnership must submit both application and a declaration within below timelines:

Requirement for Family Foundations Deadline Comments
Application to be Treated as Unincorporated Partnership Applications can be made for future tax periods
Any Tax Period ending on or before 31 December 2025 On or before 31 December 2025
For others Before financial year end
Annual Confirmation Filing  
For Tax Period ending on or before 31 March 2025 31 December 2025
For others Within 9 months from end of the financial year

 

Our Comments

This decision is effective from 1 July 2025 and applies to tax periods as specified. This decision provides a much-needed clarity on various timelines, including the extension of certain timelines. Extension of timelines for making application for Family Foundation for earlier period is a welcome move and provides much needed relief to Foundations which were unable to make an application earlier. Taxpayers in UAE must note this decision and start acting immediately on Unincorporated Partnerships where last date to file registration is 31 August 2025.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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