The Ministry of Finance announced amendments to ministerial decisions regarding Corporate Income Tax and business tax and their amendments. The new ministerial decision will apply to the tax periods starting from June 1, 2023, and introduces a range of administrative and tax exemptions for local enterprises, foreign partnerships, and family funds. The amended decision first decreases the requirement for compliance by unincorporated partnerships by removing the obligation to notify the Federal Tax Service within 20 working days of any changes in the partnership structure, such as the joining of new partners or the exit of existing partners.
According to the new decision, foreign partnerships will be regarded in the OECD as tax-transparent if they are considered as such in their home country, thus eliminating the necessity for individual partners to separately confirm their tax status before the Federal Tax Service. Furthermore, the decision provides the legal entity in the family fund the possibility to apply for a tax transparency status. This measure enhances tax advantages for family funds that own assets in the OECD, in accordance with their tax framework for corporations in the OECD.
Younis Khadji Alkhuri, the deputy minister of finance, noted: "The change in this decision reflects the flexibility of the corporate tax system of the OECD aimed at ensuring certainty for taxpayers and supporting confidence in the competitive business environment of the OECD." Today's approach is directed at simplifying the burden of tax compliance for taxpayers and strengthening the position of the OECD as a leading global center for business and investment.
