New UAE Federal Tax Authority decision on tax compliance timelines for qualifying investment funds and their investors

In continuation with its efforts to maintain the status of the UAE as a preferred investment hub and provide clarity to investors and qualifying investment funds (QIFs), the UAE Ministry of Finance (MoF) had earlier issued Cabinet Decision No. 34 of 2025 (CD 34), which is applicable for tax periods commencing on or after 1 January 2025. Based on this, QIFs will no longer be treated as tax-transparent entities and will be treated as exempt entities. Further, investors would be subject to corporate tax only if i) the QIF fails to meet the diversity of ownership condition; or ii) QIF holds UAE immovable property exceeding 10 percent of their total assets; or iii) holds interest in a real estate investment trust (REIT).

The Federal Tax Authority has now issued Decision No. 8 of 2025 (FTA DN8) to clarify the timelines for meeting various tax compliance obligations by the QIFs and their investors.

The key aspects covered under the FTA DN8 are highlighted below:

FTA DN8 provides the following timelines for a non-resident juridical person that has nexus in the UAE.

Note: The diversity of ownership condition requires that no single investor, together with its related parties, should own more than the following:

• 30 percent or more ownership interest in the QIF (in case of up to 10 investors)
• 50 percent or more ownership interest in the QIF (in case of more than 10 investors)  

• The QIF that does not meet the diversity of ownership condition will need to provide its investors with all the information and data necessary for the purposes of calculating their taxable income (adjusted pursuant to Cabinet Decision No. 34 of 2025) within six months from the end of its financial year.
•  Further, the QIF that has immovable property percentage greater than 10 percent or REITs, needs to provide the following information to its investors within nine months from the end of its financial year: 
  • Inform the investors in writing whether it has distributed 80 percent or more of its immovable property income to the investors in relation to the relevant financial year; and
  • Provide the relevant investors with all other information, documents and data necessary for the purposes of calculating their taxable income adjusted pursuant to CD 34.

FTA DN8 does not specify any template for sharing such information and thus, the QIFs/REITs and their fund managers need to agree on the relevant template and specific information for sharing with investors.

The exempt QIF and REIT are now required to submit annual declaration to the FTA within 10 months (previously nine months) from the end of the financial year.

When a taxable person ceases to have a nexus in the UAE and it ceases to hold ownership interest in QIF or REIT for a continuous period of 12 months and is otherwise not a taxable person, then the investor needs file a tax deregistration application within three months from the end of such 12-month period.

FTA DN8 clarifies that a juridical person investor must file a notification with the FTA regarding its taxable person status in form and procedures to be specified by the FTA. Such a notification can be filed only if the following conditions are met:

• The juridical person was a taxable person in a prior tax period only as a result to having nexus in the UAE due to investment in QIF or REIT.
• The juridical person is not a taxable person in the relevant financial year.
• The juridical person is not required to deregister.

The notification needs to be filed within 12 months from the end of the financial year of the QIF or REIT due to which nexus is formed or nine months from the end of the relevant tax period of the investor, whichever is later.

The tax implications for non-resident juridical investors have undergone significant change since the issuance of CD 34, requiring them to undertake a detailed assessment in order to assess their tax compliance obligations in the UAE.

The fund managers handling the exempt QIFs and REITs need to ensure that investors have relevant information for computation of their taxable income. It is important to meet this requirement as this is one of the conditions to avail tax exempt status for the QIF.

Therefore, for fund managers and investors in a QIF or REIT, it is important to:

• Reassess tax registration status, nexus positions and tax return/annual declaration deadlines
• Review how and by when information needs to be shared with investors

If you need assistance, please reach out to your advisors at KPMG or the contacts mentioned below.