Islamabad, Apr 6, 2025: The UAE Ministry of Finance has unveiled new tax regulations offering corporate tax exemptions to Qualifying Investment Funds (QIFs) and select limited partnerships.
According to the revised guidelines, income generated by QIFs will be free from UAE Corporate Tax if specific conditions are fulfilled, including a limit of 10 percent on real estate holdings and adherence to ownership diversity rules.
The regulations offer QIFs a grace period to correct any ownership diversity violations within the initial two-year qualification period.
However, these violations must not exceed a cumulative 90 days annually and cannot occur during liquidation.
Read More: Minor Earthquake Detected East of Jubail – No Impact on Saudi Territory
If the ownership diversity criteria are breached, the tax exemption is forfeited only for the non-compliant investors, as long as the fund complies with all other requirements.
Furthermore, if a QIF surpasses the 10% real estate asset threshold, only 80% of its real estate income will be subject to tax.
Foreign legal investors in REITs and QIFs who meet the specified conditions and distribute at least 80% of their income within nine months following the fiscal year-end will only need to register for Corporate Tax at the point of dividend distribution.
This update also enables specific limited partnerships to achieve tax-transparent status, bringing the UAE’s tax system in line with global standards.
