FTA Decision 15 of 2026: How DIFC Funds Apply for Corporate Tax Exemption

A DIFC fund that meets the conditions for exemption from UAE corporate tax does not become exempt automatically. It has to apply, and since 15 September 2026 the rules for that application have changed. FTA Decision No. 15 of 2026, issued on 8 September, replaces the procedure funds have followed since 2023, gives applicants a longer window, and sets catch-up deadlines for periods that have already passed. The first of those falls on 31 October 2026.

This guide explains who needs to apply, the new timetable, the order in which a fund group must file, and what to do now. It is written for fund managers, fund boards and the advisers who look after DIFC fund structures.

The short answer

Qualifying Investment Funds, pension funds and companies wholly owned by exempt owners must apply to the Federal Tax Authority to be exempt from corporate tax, after the end of each tax period and no later than 90 business days after it ends. That window was 60 business days under the previous rules. Funds sit at the top of the filing order: a subsidiary can apply only once its owner has, and its application is decided only after the owner's is approved. Catch-up deadlines of 31 October and 31 December 2026 reopen earlier periods for some groups.

What FTA Decision No. 15 of 2026 changes

The Federal Tax Authority published the Decision on 8 September 2026 and it has applied to every exemption application submitted since 15 September 2026. It repeals FTA Decision No. 7 of 2023.

The longer window is welcome. The filing order and the catch-up dates are the parts most likely to catch a fund group out.

Who has to apply

Article 4 of the Corporate Tax Law lists the categories of exempt person. Some, such as government entities, are exempt without applying. The Decision applies to the categories that must apply before their exemption takes effect:

• Qualifying Investment Funds, the category most relevant to DIFC fund structures.
• Public and regulated private pension and social security funds.
• UAE companies wholly owned and controlled by an exempt owner, such as a Qualifying Investment Fund, a pension fund or a government entity, that hold assets or invest funds for that owner, carry on its activity, or do only what is ancillary to it.
• Persons exempted by Cabinet decision, which now includes foreign companies wholly owned by exempt owners.
• Qualifying limited partnerships, and the companies they wholly own, under Cabinet Decision No. 34 of 2025.

Does your DIFC fund qualify?

Being a fund is not enough. Article 10 of the Corporate Tax Law sets the conditions for a Qualifying Investment Fund: the fund or its manager must be subject to regulatory oversight, its interests must be traded on a recognised stock exchange or marketed and made available sufficiently widely to investors, and avoiding tax must not be its main purpose, with further detail set by Cabinet decision. A DFSA-regulated fund will usually meet the first condition. The widely held condition is where private funds with a small investor base need to look carefully, and it is worth confirming your fund's position before relying on the exemption. Our comparison of Exempt Funds and Qualified Investor Funds explains how the two DIFC fund types differ in investor base.

The new timetable

The application is made after the tax period ends, never during it, and no later than 90 business days afterwards. Business days exclude weekends and federal official holidays, so the calendar date moves from year to year.

For a fund with a tax period ending on 31 December 2026, the deadline falls in mid-May 2027. The exact day depends on how the public holidays fall that spring, so work it out from the published holiday calendar rather than counting calendar days.

If approved, the exemption runs from the start of the tax period named in the application. The Authority can set a different start date in specific cases, for example where a company is acquired by a fund part-way through a tax period, in which case the exemption begins from the next tax period after every condition is met.

Parent first: the filing order for fund groups

This is the change fund groups most need to build into their calendars. A company wholly owned by a Qualifying Investment Fund or a pension fund may apply only once its owner has applied, and the Authority will not decide the subsidiary's application until the owner's has been approved.

In practice, a fund with a holding company and several SPVs beneath it should file in order from the top of the structure down:

1. The fund applies first.
2. Each wholly owned holding company applies once the fund has applied.
3. Each SPV beneath them applies once its own owner has applied.

Leaving the fund's application until the last week of the window leaves no time for the companies beneath it. Filing the fund early gives the whole group room.

The catch-up deadlines

The Decision reopens earlier periods for three groups:

The partnership deadline deserves particular attention. Under Cabinet Decision No. 34 of 2025, a qualifying limited partnership that does not apply in the first tax period the rules apply to it loses the exemption for that period and the four that follow. That makes it the most valuable date in this Decision to get right.

Keep the evidence all year

Exemption is tested period by period. Under Article 4(5) of the Corporate Tax Law, an exempt person that fails a condition at any time in a tax period ceases to be exempt from the start of that period. The new Decision no longer repeats the old provision allowing the Authority to request an annual declaration, but the obligation to be able to show the conditions were met throughout the year remains. Keep the fund's regulatory status, investor register and marketing records in order, so the evidence is ready whenever it is needed.

What to do now

• Before 31 October 2026: if any company in your structure is wholly owned and controlled by a government entity or government controlled entity, list every tax period that ended before 1 January 2026 without an exemption, check the conditions for each, and file.
• Before 31 December 2026: if you operate a qualifying limited partnership, or a foreign company owned by an exempt owner, prepare those applications now.
• For every year from here on: diarise the 90 business day deadline after each year end, and file the fund before its subsidiaries.
• If you are setting up a new fund: build the exemption application into the launch plan, alongside registration for corporate tax. Our guide to the 2026 DIFC fund regulations covers the regulatory side.

How Atlas helps

Atlas Corporate Services is a DFSA-registered Corporate Service Provider in the DIFC. We help managers set up DIFC funds and provide ongoing fund and SPV administration, including keeping group charts, ownership records and corporate calendars that make the filing order straightforward. Corporate tax registrations and exemption applications are delivered with GTAG, our sister company in the GTAG/Assetica group.

This article is general information and does not constitute legal, tax or regulatory advice. The English text of FTA Decision No. 15 of 2026 is an unofficial translation and the Arabic text governs. Confirm the position for your fund with a qualified adviser before acting.