Investment Funds and UAE CT Rules

Investment Funds & UAE CT Rules

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

FAQs on Investment Funds & UAE CT Rules

What does arm’s length mean in transfer pricing?
Arm’s length means your company sets prices with related parties as if you’re dealing with someone who isn’t related to you.
Who needs to keep a master file and local file?
Companies in a group with worldwide revenue over AED 3.15 billion, or those with revenue over AED 200 million, must keep both files.
What goes into a transfer pricing policy?
The policy lists related party deals, methods for pricing, and what papers you’ll keep as proof.
How long should you keep transfer pricing records?
Every company should keep all records for at least five years after the tax year.
Who can help you with transfer pricing documentation in UAE?
Mubarak Al Ketbi (MAK) Auditing gives expert advice and helps you keep your files correct.

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