Partnerships

Frequently Asked Questions

  • Unincorporated and incorporated partnerships get distinguished under Corporate Tax Law.
  • “Unincorporated Partnerships” (as defined in the Corporate Tax Law) are a contractual relationship or arrangement between two or more people rather than a distinct juridical entity from their partners/members. Unincorporated partnerships are considered ‘transparent’ for UAE CT purposes. As a result, an unincorporated partnership is not subject to UAE CT in and of itself. Instead, each partner is liable to UAE CT for their portion of the revenue generated by the partnership’s business.
  • The incorporated partnership covers Limited liability partnerships, partnerships limited by shares, and other forms in which none of the partners has unlimited liability for the partnership’s commitments or the acts of other partners. Such partnerships are subject to CT in the same way as a corporate entity.
  • Natural people who conduct a business or conduct a business activity through an unincorporated partnership are individually subject to UAE CT on their portion of the unincorporated partnership’s income.
  • Each partner needs to register with the UAE CT and follow the regulations of the Corporate Tax Law. The partners of an unincorporated partnership can apply to the Federal Tax Authority to have the unincorporated partnership regarded as a distinct and standalone taxable person for UAE CT purposes. If the application is accepted, the unincorporated partnership will submit a CT return on behalf of its partners.

If the required criteria are met, the partnership undergoes no taxation in the relevant foreign jurisdiction, and a foreign partnership will often be regarded as an unincorporated partnership for UAE CT purposes.

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