On 4 March 2024, the UAE Federal Tax Authority (FTA) released the Corporate Tax Guide on Taxation of Partnerships – CTGPTN1. The purpose of the guide and who should read it are summarized as follows:
This guide is designed to provide general guidance on the taxation of partnerships. The guide provides the following:
- a general understanding of how the Corporate Tax Law treats partnerships,
- information about how the Corporate Tax Law applies to a partnership and its partners, including special provisions that apply to partnerships and the tax treatment of commonly occurring events, and
- information regarding the registration, filing requirements, compliance, and other tax obligations related to partnerships and partners.
The guide should be read by persons carrying on a business in the UAE with other persons by way of a partnership arrangement or trust or any other similar association of persons. The relevant articles on corporate tax law and the implementing decisions are indicated in each section of the guide. It is recommended that the guide is read in its entirety to provide a complete understanding of the definitions and interactions of the different rules. Further guidance on some of the areas covered in this guide can be found in other topic specific guides. In some instances, simple examples are used to illustrate how key elements of the Corporate Tax Law applies to partnerships.
The examples in the guide:
- Show how these elements operate in isolation and do not show the interactions with other provisions of the Corporate Tax Law that may occur. They do not, and are not intended to, cover the full facts of the hypothetical scenarios used nor all aspects of the Corporate Tax regime, and should not be relied upon for legal or tax advice purposes and;
- are only meant for providing the readers with general information on the subject matter of this guide. They are exclusively intended to explain the rules related to the subject matter of this guide and do not relate at all to the tax or legal position of any specific juridical or natural persons.
