The EAU have announced new important fiscal rules, since it seeks to attract investment and boost the economy.
As part of its continuous efforts to improve the investment environment in the EAU, the Ministry of Finance has announced the issuance of the Cabinet Decision No. 34 or 2025 on qualified investment funds and limited associations qualified for the purposes of the federal decision of Law N. ° 47 or 2022 on the taxes of corporations and companies, which replace the provisions of the Cabinet Decision No. 81 or 2023.
The new decision aims to attract more investments and promote the growth of the national economy.
Changes of the Fiscal Rule of the EAU
Among the most significant provisions of the new decision is the introduction of favorable tax treatment, ensuring that investors derived from the income of a qualified investment fund are not subject to the EAU corporate tax on the real standard of the diversity of property conditions are not breached.
In addition, the new decision offers greater flexibility, giving Qifs a period of grace shortly after the first two years of establishment.
This grace period allows them to remedy any breach of the diversity of property requirements, demonstrated that such infractions do not exceed an aggregate of ninety days in a year or if duration or termination of the fund occur.
By further improving the fiscal framework, the new decision stipulates that any non -compliance with the diversity of property requirements will only affect the investors responsible for the violation and will not disqualify the general funds to QIF, which occurred that the relevant exemption that exempted corresponds that the relevant exemption is the relevant exemption of the relevant exemption.
In addition, any breach of the real estate asset threshold for a QIF will result in only 80 percent of real estate revenues derived from the fund subject to the EAU corporate tax.
Similarly, investors in a real estate investment trust (Reit) will only be subject to taxes on 80 percent of real estate income derived from the reit.
This is aligned with the regulatory distribution requirements applicable to the Reit in the EAU, which guarantees the consistency between the fiscal and regulatory frameworks.
Foreign legal investors in Reit and Qifs (which meet the relevant conditions) that distribute 80 percent or more of their income within nine months after the end of the financial year are only obliged to register for the corporate tax on the date of the dividend distribution.
This speeds up compliance procedures and reduces administrative burns for foreign investors.
Finally, the new decision presents a new provision that allows certain limited associations to qualify for a transparent state of effective taxes, provided they meet the necessary conditions.
This ensures that the EAU promote the global best practices for the taxes of such specific association structures.
The decision reflects the EU Government’s commitment to provide an attractive investment environment that is flexible and simplifies compliance requirements for investors, thus maintaining the EAU status as a leading investment center.
