Federal Tax Authority Hosts Workshop On Corporate Tax Regulations For Family Foundations In Abu Dhabi

The Federal Tax Authority (FTA) recently organised a workshop in Abu Dhabi to clarify Corporate Tax regulations for Family Foundations. This event aimed to explain the criteria for classifying an entity as a Family Foundation under Federal Decree-Law No. 47 of 2022, known as the Corporate Tax Law. The initiative is part of the FTA's ongoing efforts to promote awareness and ensure smooth implementation across UAE business sectors.

The workshop saw significant participation, with 290 attendees from the Family Foundations sector and officials from both public and private sectors. During the session, the FTA reiterated its call for taxpayers who have not yet registered for Corporate Tax to expedite their registration process. This would allow them to benefit from exemptions available for certain categories of taxable persons and avoid penalties due to delayed registration submissions.

To qualify for these exemptions, taxpayers must file their Tax Return within seven months from the end of their first Tax Period. This requirement applies regardless of whether the due date falls before or after the new decision's implementation. The FTA emphasised that this condition is crucial for benefiting from the exemption.

The workshop covered various topics concerning Family Foundations under the Corporate Tax Law. Experts from the FTA provided insights into how these entities are defined and treated for tax purposes. They also discussed recent developments in tax regulations affecting Family Foundations.

This year, through the EmaraTax digital platform, eligible Family Foundations can apply to be treated as Unincorporated Partnerships. To qualify, they must meet specific requirements outlined in both the Corporate Tax Law and Ministerial Decision No. 261 of 2024. This decision pertains to Unincorporated Partnerships, Foreign Partnerships, and Family Foundations under Federal Decree-Law No. 47 of 2022.

The FTA clarified that Family Foundations wishing to be recognised as Unincorporated Partnerships must first register for Corporate Tax. The application can be submitted by the taxpayer or their authorised representative. Once approved, these foundations are exempted from filing annual Corporate Tax Returns.

Individual Beneficiaries' Obligations

Moreover, individual beneficiaries associated with a Family Foundation need to assess their obligation to register for Corporate Tax themselves. They must also determine if they need to submit a Tax Return for each relevant tax period based on their circumstances.

The FTA's initiative aims to streamline compliance processes while ensuring that all stakeholders understand their obligations under current tax laws. By facilitating workshops like this one, they hope to foster voluntary compliance among businesses in the UAE.

With inputs from WAM