Are investment funds exempt from Corporate Tax?

Article 2 – Conditions to Exempt a Qualifying Investment Fund from Corporate Tax 1. An investment fund, with the exception of a Real Estate Investment Trust, shall meet all of the following conditions, in addition to the conditions under Clause (1) of Article (10) of the Corporate Tax Law, in order to apply to the Authority to be exempt from Corporate Tax as a Qualifying Investment Fund: a. The principal Business or Business Activities conducted by the investment fund are Investment Business, and any other Business or Business Activities conducted by the investment fund are ancillary or incidental to the Investment Business. b. The investors must not have control over the day-to-day management of the investment fund. Cabinet Decision No. 34 of 2025 – As published by the Ministry of Finance 3 c. To provide its investors with all information, documents and data necessary for the purposes of calculating their Taxable Income adjusted pursuant to this Decision. 2. For the purposes of applying paragraph (a) of Clause (1) of this Article, the following provisions shall apply: a. Where the Business or Business Activities of a resident Investment Manager are attributed to a resident investment fund, the Taxable Income of the Investment Manager shall be adjusted to include the net income attributed to the investment fund from such Business or Business Activities, in accordance with Article (20) of the Corporate Tax Law. b. The Business or Business Activities of an Investment Manager that are attributed to a resident investment fund shall be considered to be Investment Business where they meet one or both of the following conditions: 1) Are subject to Corporate Tax in the State through the Investment Manager. 2) Are undertaken by an Investment Manager that would meet the conditions under Clause (1) of Article (15) of the Corporate Tax Law, provided that reference to the Non- Resident Person in that Clause is replaced by reference to a Resident Person. c. Any other Business or Business Activities conducted by the investment fund shall be considered ancillary or incidental to the Investment Business if the combined Revenue of such Business or Business Activities does not exceed 5% (five percent) of the total Revenue of the investment fund in the relevant Financial Year.

Article 10 – Qualifying Investment Fund 1. An investment fund may apply to the Authority to be exempt from Corporate Tax as a Qualifying Investment Fund where all of the following conditions are met: a. The investment fund or the investment fund’s manager is subject to the regulatory oversight of a competent authority in the State, or a foreign competent authority recognised for the purposes of this Article. b. Interests in the investment fund are traded on a Recognised Stock Exchange, or are marketed and made available sufficiently widely to investors. c. The main or principal purpose of the investment fund is not to avoid Corporate Tax. d. Any other conditions as may be prescribed in a decision issued by Cabinet at the suggestion of the Minister. 2. For the purposes of monitoring the continued compliance by a Qualifying Investment Fund with the conditions of Clause 1 of this Article, the Authority may request any relevant information or records within the timeline prescribed by the Authority. Chapter Four – Taxable Person and Corporate Tax Base

Article 6 – Unincorporated Partnership 1. An Unincorporated Partnership that is treated as a Taxable Person in its own right in accordance with Clause (8) of Article (16) of the Corporate Tax Law shall be considered an entity under the definition of a Qualifying Investment Fund. 2. An Unincorporated Partnership may apply to the Authority to be exempt from Corporate Tax as a Qualifying Investment Fund, provided that all the relevant conditions specified in the Corporate Tax Law and this Decision are met.

A private pension fund may apply to the Authority to be exempt from Corporate Tax Law where all of the following conditions are met: 1. The fund comprises a pool of assets which have been assigned by law or contract as pension plan assets or the acquisition of these assets has been financed by or with the use of contributions to a pension plan for the exclusive purpose of financing the pension plan benefits. 2. The fund grants pension plan members or beneficiaries a right or other contractual claim or entitlement, against its assets or earnings. 3. The income of the fund solely comprises income as specified in the relevant decision. 4. The fund must have an Auditor.31 Example 9: A Pension Fund established in the UAE Company Y is a private pension fund established in Umm Al Quwain that meets the conditions to be exempt from Corporate Tax. The fund would like to make an application to the FTA to be treated as an Exempt Person. Company Y will be required to register for Corporate Tax as the fund will be considered a Taxable Person for Corporate Tax purposes until such time the application to be exempt for Corporate Tax is approved by the FTA. Once Company Y is registered for Corporate Tax, it can make an application to the FTA to be treated as an Exempt Person provided all the relevant conditions are met. Qualifying Investment Funds Whilst there are various structures that collective investment funds may take, the term investment fund refers to a contractual arrangement or juridical person whose primary purpose is to pool investor funds and invest such funds in accordance with a defined investment policy. Regardless of the type of investment fund, the Corporate Tax Law seeks to ensure the tax neutrality of investment funds so that investors, whether domestic or foreign, are in the same or a similar tax position as if they had invested directly in the underlying assets of the fund. In recognition of the neutrality principle, an investment fund can make an application to the FTA for exemption from Corporate Tax as a Qualifying Investment Fund where 31 Article 2 of Ministerial Decision No. 115 of 2023. Corporate Tax Guide I Registration of Resident Juridical Persons I CTGRJP1 22