May 2025 GCC Tax Update: UAE Clarifies Family Foundations, Expands Exemptions, and More
BLOGS
June 30, 2025
It’s been a busy month for tax authorities across the GCC — with a wave of important clarifications and decisions that could impact your business and clients immediately.
From Family Foundations and Corporate Tax exemptions in the UAE, to VAT shifts and e-invoicing updates across Saudi Arabia and Bahrain, here’s what you need to know now.
UAE: Major Corporate Tax & VAT Updates
Family Foundations: FTA Issues New Corporate Tax Guide (CTGFF1)
The FTA has released an extensive guide on how Family Foundations will be treated under UAE Corporate Tax law (Federal Decree-Law No. 47 of 2022).
What’s covered:
- Eligibility for fiscal transparency (so income is taxed at the beneficiary level, not the Foundation)
- Conditions to qualify as an unincorporated partnership (non-commercial activity, no tax avoidance intent)
- Treatment of income and assets — for both UAE and foreign Family Foundations
- Multi-tier structure rules — fiscal transparency must apply at every layer
- Public benefit entities must meet distribution timelines to remain exempt
Cabinet Decision No. 55 of 2025: New CT Exemptions for Foreign Entities
The UAE Ministry of Finance has expanded corporate tax exemptions to include certain foreign-incorporated entities, provided they’re wholly owned by:
- Government or government-controlled entities
- Qualifying investment funds
- Public pension or social security funds
VATP044: Reverse Charge for Concerned Services (Self-Invoicing Explained)
The FTA has clarified that when a UAE-registered business receives services from abroad, it must:
- Self-account for VAT under the reverse charge
- Declare this in Box 3 of the VAT return
- Issue a tax invoice to itself (unless exempt by the FTA)
- You have supplier documentation
- The VAT is accounted for properly
- Sufficient records are maintained
VATP043: Reverse Charge Expanded to Precious Metals & Stones
As of 15 February 2025, the Reverse Charge Mechanism now applies to a broader range of:
- Precious metals (gold, silver, palladium, platinum)
- Precious stones (diamonds, rubies, sapphires, emeralds, etc.)
Bahrain: Pillar Two Domestic Top-up Tax Arrives
First Administrative Guide Released for DMTT
Bahrain’s National Bureau for Revenue (NBR) has issued its first guide for the Domestic Minimum Top-up Tax (DMTT), aligned with the OECD’s Pillar Two global minimum tax framework.
KSA: Refund Deadlines & E-Invoicing Wave 22
Non-Resident VAT Refund Deadline Approaches
Foreign businesses registered with ZATCA and eligible for refunds must submit their 2024 VAT refund claims by 30 June 2025.
KSA E-Invoicing: Wave 22 Announced
ZATCA’s latest rollout (Wave 22) requires all businesses with SAR 1M+ taxable revenue in 2022–2024 to integrate with the FATOORA platform by 1 October 2025.
Final Thoughts from Nishe
From tax exemptions to digital invoicing mandates, the GCC’s compliance landscape is evolving quickly. Businesses must stay alert, well-advised, and proactive.
At Nishe, we help businesses and their advisors make sense of these changes and plan for what’s next.
Need help interpreting these updates for your business?
Let’s talk.
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Demystifying UAE Corporate Tax
The Ministry of Finance (MoF), UAE recently issued Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
Are you wondering what it means for you practically?
Click on the link to watch the webinar where we attempt to demystify some of the most essential provisions of the UAE Corporate Tax Law.
