Cabinet Decision No. 63 of 2025 on Unincorporated Partnership That is Treated as a Taxable Person in Its Own Right

This Cabinet Decision establishes the regulatory framework for treating unincorporated partnerships as taxable persons in their own right for corporate tax purposes. The Decision implements Clause 8 of Article 16 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.

When the Federal Tax Authority approves an application made by partners in an unincorporated partnership to be treated as a separate taxable person, the partnership shall be considered both a juridical person and a Resident Person for the purposes of the Corporate Tax Law. This treatment enables unincorporated partnerships to elect into corporate tax registration as distinct entities rather than having their income attributed to individual partners, providing flexibility in tax structuring and compliance obligations.

• Issued on 14 May 2025
• Effective from 1 June 2025
• Definitions from Federal Decree-Law No. 47 of 2022 apply to this Decision
• Implements Clause 8 of Article 16 of Federal Decree-Law No. 47 of 2022
• Upon Authority approval of an application by partners, an Unincorporated Partnership shall be treated as a Taxable Person in its own right
• The approved Unincorporated Partnership shall be considered a juridical person for Corporate Tax Law purposes
• The approved Unincorporated Partnership shall be considered a Resident Person for Corporate Tax Law purposes
• Application must be made by the partners in the Unincorporated Partnership to the Federal Tax Authority
• Authority approval is required before the treatment takes effect