What Are The Key Areas To Be Known For Investment Funds Under The Corporate Tax Law?
UAE businesses must understand the Corporate Tax (CT) law. The new CT law has different effects on each type of business. Investment funds should know how this law works. In this article, you’ll learn the key areas for CT law related to investment funds.
Key Areas To Be Known Related to Corporate Tax on The Investment Funds
This part shows the main points that every investment fund must know under UAE CT law.
CT Application On The Investment Funds And The Investment Managers
CT rules apply based on the fund’s structure. If a fund is a resident person in the UAE, it must follow CT law. If a fund is an unincorporated partnership, it’s not a taxable person. If it’s a non-resident entity, CT depends on things like permanent setup, local income, or UAE ties.
CT applies to investment managers too. They pay tax on fees earned for managing investments. CT rules change depending on how a business is set up.
Qualifying Investment Fund Status
A fund can get exempt from CT law by being a Qualifying Investment Fund. These funds are not treated as taxable persons. They also get tax reliefs and can claim tax losses.
To qualify, a fund must meet these main conditions:
- Regulatory oversight
- Fund ownership
- Main purpose
Extra rules apply to funds that are not REITs:
- Investment business activity
- Diverse ownership
- Independent management
- Use of an investment manager
REITs have their own added conditions:
- Real estate asset value
- Property ownership
- Real estate share percentage
If a fund misses any rule, it loses its exempt status.
CT Compliance Requirements for Investment Funds
Investment funds must follow CT law steps. They need to:
- Register with the FTA
- Meet the exemption conditions
- Mention their tax period in their application
If the FTA approves the request, the exemption starts from the chosen tax period. But the FTA may decide a different date if needed.
Investment Manager Exemptions
The CT law offers an Investment Management Exemption. It helps foreign investors avoid extra tax. But to enjoy this, certain rules must be met. If they’re missed, the exemption will end.
What Can Help You From Mubarak Al Ketbi (MAK) Auditing?
When CT law feels confusing, you can count on us. Mubarak Al Ketbi (MAK) Auditing guides you through tax steps. We support investment funds with planning, filing, and advice. We work hard so you don’t get lost in the rules. After all, a stitch in time saves nine.
- For more information, visit our office: “Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates”
- Or contact/WhatsApp: +971 50 276 2132
