Through Cabinet Decision No. 34 of 2025 the UAE made substantial alterations to its corporate tax framework to boost its position as an appealing and adaptable investment destination. The Ministry of Finance announced new rules which supersede decision Number 81 of 2023 by introducing simplified taxes mainly for real estate and fund management investors.
The main change of the update extends favorable tax benefits to investors who participate in Qualifying Investment Funds (QIFs). Individuals maintaining investment interests through QIFs will escape UAE Corporate Tax obligations if their funds stay within specified ownership requirements and real estate restrictions.
A QIF may take advantage of an extended diversity of ownership correction period after its initial two years of operation when such breaches do not surpass 90 days annually or ensue during fund liquidation time. The protection of investors remains strong when a breach occurs since it impacts only the investors and does not result in fund disqualification.
The adopted reforms established part exemptions from taxation for income derived from real estate deals. The real estate asset threshold triggers a taxable system that applies to QIFs and REITs so that 80% of real estate income becomes taxable income. A single unified framework between tax and regulatory distribution requires mental brain of REIT rules.
Foreign investors of compliant REITs and QIFs that distribute minimum 80% of income during the first nine months of the financial year must register for Corporate Tax only at dividend distribution times which simplifies administrative requirements.
Certain limited partnerships can obtain tax-transparent status through the new decision if they fulfill prescribed specifications.
