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for certain tax reliefs available to Taxable Persons. or negotiates contracts on behalf of the Non-Resident
These exemptions encompass Qualifying Group Relief, Person. However, a PE does not arise if the person
Business Restructuring Relief, transferring Tax Losses, or acts as an independent agent in the ordinary course
forming a Tax Group. of business. Without this exemption, an Investment
Manager’s activities might trigger a PE for a Non-
An investor in a QIF who is a taxable person must report Resident Person, deterring risk-averse investors from
their share of the net income available for distribution, using UAE-based investment managers due to potential
as shown in the QIF’s financial statements. This net tax implications.
income is divided into Exempt Income, Interest Income,
UAE Immovable Property Income, and other income. Further, The Investment Manager Exemption applies
automatically if the conditions are met.
Further, the guide explains about the allocation of
income in detail for a resident person, non-resident Transfer Pricing Considerations
person & exempt person.
The Investment Manager Exemption applies when
Furthermore, the guide also expounds on the inclusion services to Non-Resident Persons are conducted at arm’s
and definition of exempt income, interest income, length, ensuring fair compensation. If serving Related
income from immovable property & other income of the Parties, compensation must align with arm’s length
QIF. standards. Third-party arrangements with agreed-upon
fees are considered arm’s length. If majority-owned by
Applying for QIF Exemption third parties agreeing to lower fees, while equivalent
amounts are borne by Related Parties, the condition is
An investment fund entity can seek exemption from met. If the Investment Manager receives arm’s length
Corporate Tax only after registering with the FTA and compensation from a single entity covering services to
obtaining a Tax Registration Number. Once the Qualifying others within the structure, the condition is satisfied.
Investment Fund criteria are met, the fund can apply
to the FTA for exemption, indicating the intended Tax For full FTA Guide, refer to - https://bit.ly/4bUPJOv
Period. The FTA will review the application and either
approve or reject it, stating the applicable Tax Period and
reasons for rejection if applicable. Upon approval, the
fund becomes exempt from Corporate Tax.

If approved by the FTA, the Exempt Person status begins
from the specified Tax Period’s start. However, the FTA
reserves the right to assign a different start date for the
Qualifying Investment Fund

The FTA mandates an annual declaration, due within nine
months after the relevant Tax Period’s end, confirming
the continued fulfilment of exemption conditions.
Furthermore, a Qualifying Investment Fund must retain
records enabling the FTA to verify its exempt status for
seven years after the Tax Period’s conclusion.

Investment Manager Exemption

The Investment Manager Exemption aims to prevent
UAE-based investment managers and brokers from
incurring Corporate Tax liabilities for foreign investors in
typical commercial situations, enabling them to provide
discretionary investment management services and
conduct transactions on behalf of foreign customers
without creating a PE for the foreign investor. Under
Article 14 of the CT Law, a Non-Resident Person could
have a PE in the UAE if a person habitually concludes

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