Key Corporate Tax Compliance Rules for Unincorporated Partnerships, Foreign Partnerships, and Family Foundations
In a significant update to the UAE Corporate Tax framework, the Federal Tax Authority (FTA) has issued Decision No. 5 of 2025, detailing tax compliance obligations for Unincorporated Partnerships (UOPs), Foreign Partnerships, and Family Foundations. This decision is issued under Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses and will take effect from 1 July 2025.
This long-anticipated guidance provides critical clarity on how certain legal and contractual arrangements will be treated for UAE Corporate Tax purposes.
Who Is Affected?
Unincorporated Partnerships (UOPs)
Foreign Partnerships with UAE-resident partners
Family Foundations or entities fully owned by them
These entities now have clear obligations and options for tax registration, compliance, and reporting in the UAE.
Key Provisions of FTA Decision No. 5 of 2025
UOP Tax Registration Deadlines
Unincorporated Partnerships that are not treated as Taxable Persons must:
Appoint an authorised partner
Submit tax registration by:
31 August 2025, if the first financial year ended before 1 July 2025
Within 3 months from the end of the financial year, if it ends on or after 1 July 2025
Annual Declaration Requirement
The authorised partner must submit an annual declaration within 9 months of the financial year end
For financial years ending on or before 31 March 2025, the deadline is 31 December 2025
Equal Allocation of Distributive Shares
If ownership percentages are unclear, the UOP’s assets, liabilities, income, and expenses will be allocated equally among partners
Tax Deregistration
UOPs must apply for tax deregistration within 3 months of business cessation
Elective Taxable Person Status
Partners may jointly apply to treat the UOP as a Taxable Person
Application must be made before the financial year ends
If submitted by 31 December 2025, FTA may allow treatment from any earlier period
Tax Return Filing for Taxable UOPs
For UOPs treated as Taxable Persons:
Tax returns and payments must be submitted by 31 December 2025 for tax periods ending on or before 31 March 2025
Foreign Partnerships
UAE-based partners in Foreign Partnerships must include relevant details and file an annual declaration as part of their own return
Family Foundation Election
A Family Foundation (or its wholly owned entity) may apply to be treated as a UOP
Application must be submitted before the end of the relevant tax period
If submitted on or before 31 December 2025, FTA may backdate approval
Annual Confirmation by Family Foundations
Entities treated as UOPs must confirm their eligibility annually
For tax periods ending on or before 31 March 2025, the deadline is 31 December 2025
Repeal of Previous Decision
FTA Decision No. 16 of 2023 is officially repealed
What This Means for Your Business
This decision is a crucial update for tax planning and compliance for partnerships and family-owned structures in the UAE. Whether you are operating an informal partnership, are part of a foreign arrangement, or manage a Family Foundation, you must now assess your obligations and submit the relevant applications before key deadlines in 2025.
Need Help Navigating the New Compliance Landscape?
At JetUp Tax & Business Consulting, we help businesses, partnerships, and family entities align with the UAE Corporate Tax Law. Whether you need help registering your UOP, filing annual declarations, or applying for Taxable Person status, our team is ready to guide you.
- Expert support with FTA registration
- Annual declaration and compliance assistance
- Tailored advice for family structures and partnerships
Contact us today for a compliance review and stay ahead.
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