FTA have outlined new decision catering to determining requirements for registration and distributive shares of unincorporated partnership in accordance with Federal law no 47 of 2022 on taxation of corporations, businesses, and its amendment, which came into effect in June 2023.
- An Unincorporated Partnership, which is not considered as a Taxable Person, must designate one of its partners as the authorized partner. This appointed partner will act on behalf of all partners in any tax obligations and procedures.
- The authorized partner is required to submit an application to the Authority for registering the Unincorporated Partnership for Corporate Tax purposes. This process should adhere to the forms specified by the Authority, aiming to obtain a Tax Registration Number.
- The Authorized Partner is responsible for submitting an annual declaration on behalf of all partners in the Unincorporated Partnership. This declaration should be made within a period not exceeding nine months from the end of the relevant Financial Year of the Unincorporated Partnership or part thereof.
- As Corporate Tax regulations continue to evolve in the UAE, unincorporated partnerships should ensure full compliance with registration, reporting, and declaration requirements. Seeking guidance from experienced corporate tax advisors UAE can help partners understand their obligations, avoid penalties, and maintain accurate tax records. Professional tax advisors can also assist in determining distributive shares, tax registrations, and ongoing compliance with the UAE Corporate Tax framework.
- The Financial Year of an Unincorporated Partnership is either the Gregorian calendar year or a twelve-month period for which the Unincorporated Partnership prepares financial statements.
- Upon approval of the application submitted by the partners, if the Unincorporated Partnership is granted Taxable Person status by the Authority, it is obligated to adhere to the provisions outlined in Federal Decree-Law No. 47 of 2022.
- In cases where the distributive share of the partners is not specified, the assets, liabilities, income, and expenditures of the Unincorporated Partnership shall be distributed equally among each partner in the partnership.
This Decision shall be published in the Official Gazette and shall come into effect as of 1 June 2023.
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