The first few months have flown by, and it is hard to believe we already have Ramadan and Eid Al Fitr behind us. The tax world also keeps on changing and especially throughout the Gulf region, it is key for all tax professionals of us to keep up to date of the latest tax developments. In this edition of Gulf Tax Insights, we explore the latest tax updates within the Gulf Cooperation Council (GCC) member states, highlighting critical changes and insights that impact businesses and investors.
UAE Federal Tax Authority publishes policy on issuing tax clarifications and directives
In February 2025, the UAE Federal Tax Authority (FTA) issued Decision No. 2 of 2025 on the FTA's Policy on issuing Clarifications and Directives, effective 1 March 2025, whereby the general framework for the procedures for issuing the mentioned instruments is established. Many taxpayers in the UAE will be preparing for the first Corporate Income Tax (CIT) reporting later this year in respect of the Financial Year 2024. Whilst these preparations give rise to various questions on interpretation of the CIT rules, requesting certainty in advance from the FTA – e.g., in the form of a private clarification – will be very helpful for taxpayers.
Saudi Arabia – key tax updates
As Saudi Arabia's tax environment keeps developing at a swift pace, several notable publications were issued in the first months of 2025. In particular, the Zakat, Tax and Customs Authority issued two guidelines, the first, in relation to Withholding Tax for purposes of applying Double Tax Treaties (DTTs) and the second, on Advance Pricing Agreements. In addition, a draft of the implementing regulations to the Real Estate Transaction Tax Law has also been published on Istitla platform, for public consultation.
UAE Cabinet Decision introduces tax changes to Qualifying Investment Funds and Qualifying Limited Partnerships
On April 5, 2025, the UAE Ministry of Finance published Cabinet Decision No. (34) of 2025, introducing significant changes to the regimes governing Qualifying Investment Funds (QIFs) and Qualifying Limited Partnerships (QLPs) for purposes of the CIT regime. Whilst the changes entail improvements for investment funds and investors, the Cabinet Decision does also bring in certain complexities for QIFs and QLPs. The new Cabinet Decision has retroactive effect to Tax Periods starting on or after 1 January 2025.
Double Tax Treaty Developments
Over the past month, we witnessed the continued strengthening of international business relations through the expansion and updating of DTT networks among GCC Member States. These developments aim to enhance the Gulf region’s attractiveness as a global business hub, facilitating smoother cross-border trade and investment activities.
Through these articles, we aim to provide you with insightful analysis and updates on the evolving tax landscape in the UAE and the wider GCC region. We hope this edition offers valuable knowledge to navigate the complexities of the current tax environment. As always, we look forward to your thoughts, comments, and feedback.
