What is new in UAE federal tax? Especially note the last 2 guides issued last week
Research Question
What is new in UAE federal tax? Especially note the last 2 guides issued last week
AI Analysis
The Two Latest FTA Guides (Early-to-Mid June 2026)
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- Direct Answer
The two guides issued in the past week (i.e., around early-to-mid June 2026) are:
- VAT Guide VATGRH1 — VAT Refund for UAE Nationals Building New Residences (updated June 2026)
- Corporate Tax Guide CTGFF1 — Taxation of Family Foundations (issued June 2026)
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1. VAT Guide VATGRH1 — VAT Refund for UAE Nationals Building New Residences (June 2026 update)
This guide was revised in April 2026 and then updated again in June 2026 to incorporate FTA Decision No. 5 of 2026 (issued 2 June 2026, effective 1 January 2026). The June 2026 update expands the list of eligible expense items for VAT refund. Newly confirmed eligible items include: electronic/smart doors and gates, landscaping (e.g., trees), smart and security systems fixed and integrated within the residence, and swimming pools, fountains, and domestic decorative water features. Conversely, landscaping or smart security systems installed after the residence is already completed are not eligible. The guide also now reflects the Maskan smart application for managing refund claims and the EmaraTax digital process. [VATGRH1; FTA Decision No. 5 of 2026]
Key parameters:
| Item | Detail |
|---|---|
| Refund deadline | 12 months from completion (earlier of occupancy, completion certificate, or FTA-stipulated date) |
| Retention payment claim | Within 6 months of first retention payment |
| Review period | Up to 20 Business Days from full document submission |
| Family Book | Replaced by "Family Data" from 2024 |
The guide clarifies the meaning of "residence" for the purposes of the New Residences Refund Scheme and confirms that the building must not be part of the Applicant's Business. The Applicant must be a UAE National with Family Data, and the residence must be a newly constructed building — renovations or extensions to existing residences do not qualify.
Eligible expenses must relate to Goods and Services used in the original construction of the residence. The guide includes a detailed appendix (Appendix 1) listing specific expense items that are eligible and not eligible. Items installed or added after the residence is already completed — even if they are of a type that would otherwise qualify — are not eligible for refund.
The guide also addresses correction of errors: if an Applicant discovers an error in a previously submitted Refund Request, they should contact the FTA to request a correction. Common errors flagged by the guide include submitting invoices that are not valid Tax Invoices, claiming expenses for items not related to the construction of the residence, and failing to submit all required supporting documents.
> Simply put: UAE nationals building a new home can now claim VAT refunds on a wider range of items — including smart home systems, pools, and landscaping — provided they are installed as part of the original construction, not added afterwards. The Maskan app streamlines the process by letting you upload invoices during construction.
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2. Corporate Tax Guide CTGFF1 — Taxation of Family Foundations
This guide provides the FTA's detailed guidance on how family wealth management structures — including family foundations, trusts, and similar arrangements — are treated under Corporate Tax. It supplements [CTP008] (the Public Clarification on family wealth management structures) and [MD 261/2024] on Unincorporated Partnerships, Foreign Partnerships, and Family Foundations. [CTGFF1; [CTP008](#LEG:164); MD 261/2024]
The guide addresses the following key topics:
What qualifies as a Family Foundation: Any foundation, trust, or similar entity — whether domestic or foreign — that meets the conditions of Article 17(1) of the Corporate Tax Law. A "similar entity" means one with a legal structure or character similar to a foundation or trust; a limited liability company would not qualify. Entities wholly owned and controlled by a Family Foundation may also be treated as part of the structure.
Tax transparency vs. Taxable Person status: A Family Foundation (or family wealth management vehicle) that does not have a separate legal personality is automatically treated as tax transparent — it is not a Taxable Person in its own right. Examples include trusts established under ADGM or DIFC trust laws. A Family Foundation that does have a separate legal personality can apply to the FTA to be treated as tax transparent, provided it meets the five conditions under Article 17(1) of the Corporate Tax Law [FDL 47/2022, Art. 17(1)]:
| Condition | Summary |
|---|---|
| Beneficiary condition | Beneficiaries must be natural persons, Qualifying Public Benefit Entities, or other entities meeting specified criteria |
| Principal activity condition | Principal activity must be receiving, holding, investing, disbursing, or otherwise managing assets or funds associated with savings or investment |
| No Business Activity condition | Must not conduct a Business or Business Activity |
| No tax avoidance condition | Must not be established or used to avoid Corporate Tax |
| Distribution condition | Where beneficiaries include public benefit entities, specific distribution requirements apply — including that income that would be Taxable Income must be distributed to the relevant beneficiaries within 6 months from the end of the relevant Tax Period [MD 261/2024, Art. 5(1)] |
Multi-tier structures: The guide provides detailed analysis — including worked examples — of how multi-tier family wealth structures are treated, covering scenarios where a Family Foundation holds interests through intermediate holding vehicles or SPVs. Entities wholly owned and controlled by a tax-transparent Family Foundation (directly or through an uninterrupted chain of other tax-transparent entities) may themselves apply to be treated as tax transparent [MD 261/2024, Art. 5(2)].
Corporate Tax implications when treated as an Unincorporated Partnership: Where a Family Foundation is treated as an Unincorporated Partnership, the guide explains the treatment of income attribution to beneficiaries, deductible expenditure, payments to beneficiaries for services, Foreign Tax Credits, distributions, transfers to the foundation, and the acquisition or disposal of juridical persons by the foundation.
Family offices: The guide addresses the treatment of Single Family Offices (SFOs) and Multi Family Offices (MFOs). Where an SFO or MFO is a juridical person that does not meet the conditions of Article 17 of the Corporate Tax Law, it is a Taxable Person subject to Corporate Tax on all its income. If it is a Free Zone Person, it may benefit from the 0% rate on Qualifying Income from Qualifying Activities — but only if the relevant services (e.g., wealth and investment management, fund management) are subject to regulatory oversight by a Competent Authority (UAE Central Bank, DFSA, or FSRA). Holding a licence alone, without regulatory oversight, is not sufficient [CTP008].
Tax compliance: The guide sets out registration requirements, the application process to be treated as an Unincorporated Partnership (including for foreign entities and multi-tier structures), and the annual confirmation obligations. A Family Foundation that ceases to meet the conditions must notify the FTA and will be treated as a Taxable Person from the beginning of the Tax Period in which it failed to meet the conditions.
> Simply put: The new guide explains when a family foundation pays Corporate Tax itself versus when income flows through to its beneficiaries — critical reading for any adviser structuring family wealth in the UAE. Family offices need regulatory oversight (not just a licence) to access the 0% free zone rate on management services.
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> Important: Practitioners advising on family wealth structures should review both CTGFF1 and [CTP008](#LEG:164) together, as the guide supplements — but does not replace — the Public Clarification. The conditions for tax transparency are cumulative: failure to meet any one of the five conditions means the foundation is a Taxable Person in its own right.