🇦🇪UAE

غرامات ضريبة الشركات على الـ Carried Interest

2 verified sources

Definition

Carried interest calculation errors result in incorrect profit allocation, triggering FTA audits under Corporate Tax regime effective June 2023. Misclassifying carry as non-taxable or failing transfer pricing documentation exposes firms to penalties.

Key Findings

  • Financial Impact: 9% Corporate Tax on AED 1M fund profits = AED 90,000 base tax; penalties 1-200% of tax due (AED 90,000 - AED 1.8M per instance); 20-40 hours/month manual waterfall computation.
  • Frequency: Annual filing; quarterly VAT if applicable
  • Root Cause: Complex distribution waterfalls (hurdle 8-10%, American-style deal-by-deal carry) calculated manually without FTA-compliant TP documentation.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Venture Capital and Private Equity Principals.

Affected Stakeholders

Fund Managers (GPs), CFOs, Compliance Officers

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

احتيال في حساب الـ Carried Interest

20% premature carry on AED 1M profits = AED 200,000 clawback + legal fees AED 50,000-100,000; industry disputes 2-5% of fund profits.

أخطاء في حساب رسوم الإدارة

2% fee error on AED 100M AUM = AED 20,000/month leakage; plus 5% VAT AED 1,000; 10-20 hours/month reconciliation.

خسائر فرص الخروج (Exit Opportunity Losses)

AED 10-50M per fund in missed valuations; 60%+ deals require international buyers adding delays

تأخير دورة الصندوق (Fund Cycle Delays)

AED 5-20M idle capital per fund from 1-2 year extensions (2-5% of typical AED 100-500M fund)

مخاطر غسيل الأموال في الوثائق

AED 50,000 - 200,000 per AML breach

تكاليف تدقيق الـ LP الزائدة

20-40 hours/month manual prep; AED 50,000+ annual audit fees per fund

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