A who is the beneficiary in the foundation is also taking a salary for managing the assets. In this case merely overseeing the management of the foundation’s assets (e.g., making strategic decisions regarding properties, ensuring proper maintenance, and liaising with tenants or third parties), this would likely be classified as passive asset management rather than active business activity. Is this a correct statement?
In this case, the salary would simply be a remuneration for managing personal/family assets, which aligns with the foundation’s purpose of holding and managing assets for the benefit of its beneficiaries. This does not, by itself, trigger a taxable business activity. Is this understanding correct?
As per cabinet decision No. 49 of 2023 on UAE Corporate Taxation for resident and non-resident natural person , Corporate Tax only applies to natural persons who are engaged in Business or Business Activities in the UAE and earn turnover from business or business Activities in excess of AED 1,000,000 in a Gregorian calendar year (Jan-Dec). However, if a natural Person receives wages or salary, then such income will not be subject to Corporate Tax and are excluded from the AED 1,000,000 turnover threshold.
This implies that the beneficiary (natural person) in the foundation deriving remuneration (salary) for managing personal/family assets of the foundation will not be subject to UAE Corporate Tax.
Furthermore, merely overseeing the management of the foundation assets will not constitute business activity for the beneficiary.