The UAE’s Federal Tax Authority (FTA) issued Decision No. 5 of 2025, effective July 1, 2025, bringing tighter corporate tax compliance for previously exempt entities such as unincorporated partnerships, foreign partnerships, and family foundations.
These entities must now register, declare taxes annually, and can opt to be a Taxable Person, aligning with global audit standards and UAE Tax Law.
Understanding the Changes in Corporate Tax
1. Mandatory Registration
An authorized partner must register unincorporated partnerships with the FTA and obtain a Tax Registration Number (TRN).
- First financial year ending before July 1, 2025: Register by August 31, 2025
- First financial year ending after July 1, 2025: Register within 3 months of year-end
2. Annual Declarations
Annual declarations are required within nine months post financial year-end, detailing each partner’s distributive share.
Default allocations apply equally if not specified
Special transition rule: If the year-end was on or before March 31, 2025, the deadline extends to December 31, 2025
3. Option to Elect as a Taxable Person
Partnerships can choose to be treated as a taxable person.
Applications submitted before December 31, 2025, may be backdated to earlier 2025 tax periods
4. Deregistration
If a partnership ceases operations, a deregistration application must be submitted within three months of cessation
5. Family Foundations & Foreign Partnerships
These entities can follow similar rules, registering, declaring, or electing taxable status under the same compliance framework
What Businesses Need to Do Now
- Review your structure, determine whether you’re operating as an unincorporated partnership or family foundation.
- Appoint a responsible partner for FTA registration.
- Submit timely annual declarations with detailed financial disclosures.
- Evaluate whether electing taxable status provides benefits such as simplified reporting.
- Plan for deregistration if operations wind down.
Staying ahead not only ensures compliance but also strengthens your financial governance and audit readiness.
How KLOUDAC Can Help
KLOUDAC supports businesses in adapting to these new FTA compliance rules with tailored corporate tax services:
- Selecting the right entity structure and tax strategy
- Completing FTA registration and preparing annual declarations
- Advising on taxable person election for optimal financial positioning
- Handling deregistration procedures when needed
Contact us for expert guidance to stay compliant and strategically positioned.