Insights Corporate Tax
Corporate Tax Group UAE: How Parent and Subsidiaries File as One
How a UAE Corporate Tax Group works under Article 40 of Federal Decree-Law 47 of 2022 — the 95% tests and the audited statements the FTA now demands.
Key takeaways
- A Tax Group treats a parent and its ≥95%-owned resident subsidiaries as one taxable person filing a single return
- Article 40(1) of Federal Decree-Law No. 47 of 2022 sets eight conditions covering ownership, residence, year end and standards
- Ministerial Decision No. 301 of 2024 replaced MD 125/2023 for tax periods commencing on or after 1 January 2025
- FTA Decision No. 7 of 2025 requires audited aggregated financial statements, not an IFRS 10 consolidation
- Every member is jointly and severally liable for the group''s corporate tax under Article 40(6)
- A subsidiary leaving the group must be notified to the FTA within 20 business days
A UAE Corporate Tax Group is an election under Article 40 of Federal Decree-Law No. 47 of 2022 that treats a resident parent and its at-least-95%-owned resident subsidiaries as one taxable person. The parent files a single return, intra-group transactions are eliminated on consolidation, and every member is jointly and severally liable for the group’s corporate tax.
Grouping is one of the most useful structural reliefs in the UAE Corporate Tax regime and one of the most misunderstood. It looks like a filing shortcut. It is closer to a merger of tax personalities, with consequences reaching into liability, financial reporting and the saleability of individual subsidiaries.
Two developments have changed the picture since the regime started. Ministerial Decision No. 301 of 2024, issued 9 December 2024, replaced Ministerial Decision No. 125 of 2023 for tax periods commencing on or after 1 January 2025. FTA Decision No. 7 of 2025, issued 16 July 2025, then defined exactly what a tax group’s audited financial statements have to look like. Neither is optional reading if you already hold a group.
What a Tax Group actually does
Article 40(4) states the effect in one line: a tax group formed under Article 40(1) is treated as a single taxable person, represented by the parent company. Article 40(5) makes the parent responsible for the obligations in Chapters Fourteen, Sixteen and Seventeen on the group’s behalf, and Article 53(7) makes the parent file the return.
Article 42(1) does the arithmetic. The parent consolidates the financial results, assets and liabilities of each subsidiary for the relevant tax period, eliminating transactions between the parent and each subsidiary that is a member of the group.
95%
The minimum share capital, voting rights and profit entitlement a parent must hold in each subsidiary under Article 40(1)(b) to (d) of Federal Decree-Law No. 47 of 2022
The commercial value is straightforward. A profitable trading company and a loss-making sibling under the same 95% parent can offset in the same period without waiting for carry-forward relief. Internal sales, management charges and intercompany interest wash out. One return replaces several.
The eight conditions in Article 40(1)
Every row below was read against the English text of Federal Decree-Law No. 47 of 2022 as published by the UAE Ministry of Finance, on 4 August 2026.
| Art 40(1) | Condition |
|---|---|
| (a) | The resident persons are juridical persons |
| (b) | The parent owns at least 95% of the share capital of the subsidiary, directly or indirectly |
| (c) | The parent holds at least 95% of the voting rights in the subsidiary, directly or indirectly |
| (d) | The parent is entitled to at least 95% of the subsidiary’s profits and net assets, directly or indirectly |
| (e) | Neither the parent nor the subsidiary is an exempt person |
| (f) | Neither the parent nor the subsidiary is a qualifying free zone person |
| (g) | The parent and the subsidiary have the same financial year |
| (h) | Both prepare financial statements using the same accounting standards |
Article 40(2) carves out one exception to paragraph (e). Subsidiaries in which a government entity directly or indirectly owns at least a 95% ownership interest as specified in paragraphs (b), (c) and (d) can form a tax group, subject to conditions prescribed by the FTA.
Paragraph (f) is the trade-off most UAE groups have to price. A free zone entity earning 0% on qualifying income under Article 18 cannot join — the conditions it would forfeit are set out in our guide to the qualifying free zone person and the QFZP 0% rules. Paragraph (e) does the same for an exempt person under UAE corporate tax, and Article 4(2) extends that bar to government and natural-resource entities taxable on a licensed business.
What Ministerial Decision No. 301 of 2024 added
| MD 301/2024 | Rule |
|---|---|
| Art 2(1) | Article 40(1) conditions must be met continuously throughout the tax period |
| Art 2(2) | “Share capital” means nominal issued and paid-up capital, or membership or partnership capital |
| Art 3(1) | Members must not be treated as tax resident in another country under an international agreement in force in the UAE |
| Art 3(2) | A member that becomes resident elsewhere leaves the group from the beginning of that tax period |
| Art 4(1) | Intra-group transactions must not be eliminated where a member recognised a deductible loss on them before joining, until that loss reverses in full |
| Art 5(1) | The application to form or join must reach the FTA before the end of the tax period concerned |
| Art 5(5) | A newly established subsidiary may join from its date of incorporation |
| Art 12 | Notify the FTA within 20 business days when a subsidiary leaves or the group ceases |
| Art 13 | Departing members adopt the group’s recorded values as opening values in their standalone statements |
| Art 14 | Repeals MD 125/2023, which continues to apply to periods commencing before 1 January 2025 |
Article 5(1) is the one that catches groups out. The application window closes at the end of the tax period you want the grouping to start in, not at the return deadline nine months later. A group that decides in October 2026 that it wanted to be grouped for calendar 2025 has missed it.
How consolidation and loss offset work in practice
The starting point is the sum of the members’ accounting results. The return is filed by the parent company that made the election, so that entity carries the reporting relationship with the FTA even where the trading sits in a subsidiary.
Where ownership runs through several tiers, be precise about which company heads the Tax Group and which is the name of the ultimate parent company of the taxable person further up the chain. They are often not the same entity, and other parts of the regime — country-by-country reporting in particular — key off the ultimate parent rather than the UAE one.
From there, intra-group transactions are eliminated. If Company A sold goods to Company B within the group, that internal sale and the matching purchase cancel out, because from the group’s perspective nothing left the group. Article 6(1) of Ministerial Decision No. 301 of 2024 extends the elimination to transactions between two or more subsidiaries, and to valuation adjustments and provisions on those transactions.
Article 6(2) closes a loophole. Where a gain or loss between members has been eliminated, the elimination must also capture any change in the accounting value of the relevant assets and liabilities that arose in consequence of that gain or loss.
Pre-grouping losses: the rules that decide the value
| Source | Rule |
|---|---|
| FDL 47/2022 Art 42(3) | A joining subsidiary’s unutilised losses become pre-grouping tax losses, usable only against income attributable to that subsidiary |
| FDL 47/2022 Art 42(4) | The existing group’s losses cannot offset income attributable to a newly joined subsidiary |
| FDL 47/2022 Art 37(2) | Loss relief in any period is capped at 75% of taxable income before relief |
| MD 301/2024 Art 7(1) | Pre-grouping losses usable = the lower of income attributable to that subsidiary and the Article 37(2) cap |
| MD 301/2024 Art 7(2) | Pre-grouping losses must be used before the group’s own carried forward losses |
| MD 301/2024 Art 8(4) | Pre-grouping losses are forfeited where the group fails to attribute income and uses less than it could have |
| FDL 47/2022 Art 42(6) | On exit, pre-grouping losses leave with the subsidiary; group losses stay with the group |
| FDL 47/2022 Art 42(7) | On cessation, losses stay with the parent if it remains a taxable person |
Article 8(4) of Ministerial Decision No. 301 of 2024 deserves a second read. Forfeiture is not a penalty for using the losses badly. It is the consequence of skipping the attribution exercise altogether while under-using the relief. Article 8(6) applies the same forfeiture rule to pre-grouping carried forward net interest expenditure.
The audited statements requirement that changed for 2025
Ministerial Decision No. 84 of 2025, issued 25 March 2025, sets out who must prepare audited financial statements. The split matters, because the AED 50 million test everyone quotes does not apply to groups.
| MD 84/2025 | Who | Requirement |
|---|---|---|
| Art 2(1)(a) | A taxable person that is not a tax group with revenue above AED 50,000,000 | Audited financial statements |
| Art 2(1)(b) | Every qualifying free zone person | Audited financial statements, no revenue test |
| Art 2(2) | A tax group | Audited special purpose financial statements in the FTA’s specified form |
| Art 2(4) | A non-resident person | Only revenue through UAE PEs and nexuses counts toward AED 50m |
| Art 3 | — | Repeals MD 82/2023, which still applies to periods commencing before 1 January 2025 |
| Art 4 | — | Applies to tax periods commencing on or after 1 January 2025 |
A tax group with AED 12 million of revenue is caught by Article 2(2) just as firmly as one with AED 400 million. There is no de minimis for groups.
What FTA Decision No. 7 of 2025 requires
Every row below was read against the English text of FTA Decision No. 7 of 2025 as published by the Federal Tax Authority, on 4 August 2026.
| FTA Dec 7/2025 | Requirement |
|---|---|
| Art 2(1) | The group prepares special purpose statements in the form of Aggregated Financial Statements |
| Art 2(2) | Those statements must be audited under a special purpose framework in accordance with the relevant ISAs |
| Art 2(3) | They must be submitted to the FTA no later than 9 months from the end of the tax period |
| Art 3(1) | Built by aggregating members’ standalone financial statements and eliminating transactions between them |
| Art 3(3) | Must comply with IFRS or IFRS for SMEs, subject to the carve-outs below |
| Art 3(3)(a) | Standalone statements must not reflect IFRS 3 business combinations or IFRS 10 consolidation for aggregation |
| Art 3(3)(b) | Goodwill, bargain purchase gains and fair value adjustments from IFRS consolidation are not recorded |
| Art 3(3)(d) | Line-by-line aggregation, without eliminating investments against corresponding equity |
| Art 3(3)(e)–(f) | Impairment on investments in fellow members is not eliminated where the holding is direct |
| Art 3(4)(d) | Members’ standalone statements must follow IFRS or IFRS for SMEs |
| Art 3(4)(e) | Members must use uniform accounting policies |
| Art 3(4)(g) | Investments in subsidiaries, joint ventures and associates outside the group are carried at cost less impairment |
| Art 3(4)(h) | The aggregated statements must be presented in AED |
| Art 4(1) | Four statements: financial position, profit or loss, other comprehensive income, changes in equity |
The distinction between aggregation and consolidation is the substance of this decision, not a technicality. An IFRS 10 consolidation eliminates the parent’s investment against the subsidiary’s equity. Article 3(3)(d) of FTA Decision No. 7 of 2025 expressly does not. A group that hands its auditor a set of IFRS consolidated accounts and asks for a special purpose opinion has not met the requirement.
Aggregation is not consolidation with a different label. FTA Decision No. 7 of 2025 strips out exactly the adjustments that IFRS 10 exists to make, and it does so deliberately, so the tax base tracks the members rather than the acquisition history.
A worked example in AED
Meridian Holding LLC, a Dubai mainland company, owns 100% of two resident subsidiaries and forms a tax group with effect from 1 January 2025. Its calendar-year results are set out below.
| Member | Accounting profit / (loss) | Note |
|---|---|---|
| Meridian Holding LLC (parent) | AED 300,000 | Management fees, all charged internally |
| Meridian Trading LLC | AED 6,400,000 | AED 1,200,000 of sales were to the logistics subsidiary |
| Meridian Logistics LLC | (AED 1,800,000) | Carries AED 900,000 of pre-grouping losses from 2024 |
Aggregation removes the parent’s AED 300,000 of internal management fees and the AED 1,200,000 internal sale together with the matching purchase, so neither inflates the group result. The aggregated taxable income for 2025 is AED 4,600,000.
The AED 900,000 of pre-grouping losses sitting in Meridian Logistics LLC cannot simply reduce that figure. Article 7(1) of Ministerial Decision No. 301 of 2024 caps their use at the lower of the group’s income attributable to Meridian Logistics LLC and the Article 37(2) ceiling. Since that member is loss-making in 2025, no income is attributable to it and the AED 900,000 carries forward untouched.
Corporate tax for 2025 is therefore calculated on AED 4,600,000. Under Article 3(1) and Cabinet Decision No. 116 of 2022, the first AED 375,000 is taxed at 0% and AED 4,225,000 at 9%, giving AED 380,250 payable. The return and payment fall due within nine months of 31 December 2025 under Article 53(1), so by 30 September 2026 — the same date as the audited aggregated statements under Article 2(3) of FTA Decision No. 7 of 2025.
What the group actually saves
Run the same three companies on standalone filings. Meridian Trading LLC pays 9% on AED 6,400,000 less the AED 375,000 band, which is AED 542,250. Meridian Holding LLC pays nothing on AED 300,000. Meridian Logistics LLC pays nothing and carries its loss forward. Total standalone tax is AED 542,250.
Grouping saves AED 162,000 for the period, and that saving comes from two places: the current-year loss absorbing group profit, and the elimination of an internal management fee that would otherwise be taxable in the parent while deductible lower down.
Where transfer pricing still bites
Eliminating internal transactions in the return does not switch off Article 34. Article 8(1) of Ministerial Decision No. 301 of 2024 forces the group to attribute taxable income to individual members in four situations.
| MD 301/2024 Art 8(1) | Trigger |
|---|---|
| (a) | The group uses a member’s unutilised pre-grouping tax losses |
| (b) | A new member joins while the existing group holds unutilised losses |
| (c) | A member benefits from corporate tax incentives under Article 20(2)(g) |
| (d) | The group uses a member’s pre-grouping carried forward net interest expenditure under Article 30(4) |
Where any of those apply, Article 8(2)(a) requires the attribution to follow the arm’s length principle in Article 34, and Article 8(2)(b) allows the FTA to demand disclosure under Article 55(1) of transactions between the relevant members and the rest of the group, and with related parties and connected persons outside it.
Transactions with related parties outside the group never stopped being in scope. A sister company that did not join, a foreign parent, a connected person — all still have to meet the arm’s length standard and support it with documentation. Article 55(3) and Article 55(4) give the FTA a 30-day turnaround on requests for the master file, local file and supporting information.
Formation, exit and cessation timetable
| Event | Timing | Source |
|---|---|---|
| Apply to form a group or admit a subsidiary | Before the end of the tax period concerned | MD 301/2024 Art 5(1) |
| Application to replace the parent company | Before the end of the relevant tax period | MD 301/2024 Art 5(2) |
| A newly established subsidiary joining | From its date of incorporation | MD 301/2024 Art 5(5) |
| Formation takes effect | Beginning of the tax period specified in the application | FDL 47/2022 Art 41(1) |
| A member that fails Article 40(1) leaves | Beginning of the tax period in which the conditions failed | FDL 47/2022 Art 41(3) |
| Notify the FTA of an exit or cessation | Within 20 business days of the conditions failing | MD 301/2024 Art 12 |
| File the group return and pay | Within 9 months of the tax period end | FDL 47/2022 Art 53(1) |
| Submit audited aggregated financial statements | Within 9 months of the tax period end | FTA Dec 7/2025 Art 2(3) |
| Retain records | 7 years after the end of the tax period | FDL 47/2022 Art 56(1) |
What it costs when a group slips
| Item | Violation | Penalty (AED) |
|---|---|---|
| 1 | Failure to keep required records and information | 10,000; 20,000 for a repeat within 24 months |
| 4 | Failure to notify the FTA of a change to the tax record | 1,000; 5,000 for a repeat within 24 months |
| 7 | Late tax return | 500 per month for months 1–12; 1,000 per month from month 13 |
| 8 | Failure to settle payable tax | Monthly penalty of 14% per annum on the unsettled amount |
| 10 | Voluntary disclosure of errors in a return | 1% per month on the tax difference |
| 11 | Failure to disclose before audit notification | Fixed 15% of the tax difference plus 1% per month |
| 12 | Failure to facilitate a tax auditor | 20,000 |
| 14 | Late tax registration application | 10,000 |
Those figures come from the table annexed to Cabinet Decision No. 75 of 2023 and its amendments, read on 4 August 2026. Item 4 is the one that bites on the 20-business-day notification in Article 12 of Ministerial Decision No. 301 of 2024. Because of Article 40(6), the FTA can pursue any member for the whole amount.
The reliefs that sit alongside grouping
If the 95% tests are out of reach, two narrower reliefs remain and neither requires a group.
Tax loss transfer under Article 38 works at 75% direct or indirect common ownership. Both persons must be juridical, resident, non-exempt and not qualifying free zone persons, with the same financial year end and the same accounting standards. Article 38(1)(d) requires the common ownership to exist from the start of the period in which the loss arose to the end of the period in which the other person uses it.
Carry-forward under Article 37 lets a company use its own losses in later periods, capped at 75% of taxable income before relief. Article 39(1) then requires continuous 50% ownership, or continuation of the same or a similar business after a change of more than 50%, unless the shares are listed on a recognised stock exchange. Those tests interact with the deduction rules we set out in our guide to taxable income and deductions under UAE corporate tax.
Deciding whether to form one
Grouping earns its keep where members have genuinely offsetting results and clean intercompany flows. It costs where they do not.
Against the saving, weigh joint and several liability under Article 40(6), a locked shared financial year and accounting framework under Article 40(1)(g) and (h), the two-year clawback on intra-group asset transfers in Article 42(9), the audited aggregated statements in FTA Decision No. 7 of 2025, and the complication a group adds to selling any single subsidiary.
If you hold a free zone entity you want to keep on 0%, a subsidiary earmarked for sale, or members whose results all run the same direction, standalone filing plus Article 38 loss transfer may serve you better. It is a modelling exercise, not a default.
Where this leaves your group
A UAE Corporate Tax Group is a structural decision with a tax number attached, not a tax number with structure attached. The eight conditions in Article 40(1) have to hold continuously. The application has to land before the tax period ends. The aggregated statements have to be audited and filed within nine months. Every member carries the group’s debt.
Where the economics work, the relief is real and worth taking. Where they do not, the flexibility you keep by staying separate is usually worth more than the return you save. Model both before you elect, and revisit the model whenever a member’s result, ownership or residence changes.
Velmont Crest is a DED-licensed UAE accounting firm providing advisory and preparation support on Corporate Tax grouping, consolidation, transfer pricing documentation and FTA filings for SMEs and family groups across the mainland and free zones. Read more on our insights hub, see our corporate tax services, or get in touch via our contact page.
Disclaimer: Velmont Crest is a DED-licensed accounting firm providing advisory, preparation and compliance support services. We are not a law firm, the Federal Tax Authority, or an FTA-registered tax agent representing clients before the FTA. UAE Corporate Tax grouping rules are set and updated by the Ministry of Finance and the Federal Tax Authority — verify your specific position against current legislation and FTA guidance, and take professional advice tailored to your circumstances before acting.
References
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses — UAE Ministry of Finance
- Ministerial Decision No. 301 of 2024 on Tax Group — UAE Ministry of Finance
- FTA Decision No. 7 of 2025 on Audited Special Purpose Financial Statements for a Tax Group — Federal Tax Authority
- Ministerial Decision No. 84 of 2025 on Audited Financial Statements — Federal Tax Authority
- Cabinet Decision No. 75 of 2023 and its amendments on Administrative Penalties — Federal Tax Authority
- UAE Government portal — Corporate Tax — u.ae
Frequently asked questions
- What exactly is a Corporate Tax Group in the UAE?
- It is an election under Article 40 of Federal Decree-Law No. 47 of 2022 that lets a UAE parent company and its qualifying resident subsidiaries be treated as one taxable person for Corporate Tax. Instead of each company filing its own return, the group files one return through the parent under Article 53(7). Article 42(1) requires the parent to consolidate the financial results, assets and liabilities of each subsidiary and eliminate transactions between members. The practical benefit is that a profit in one member can absorb a loss in another in the same tax period, which standalone companies cannot do.
- What ownership level do I need to form a UAE Tax Group?
- Article 40(1) requires three separate 95% tests, each of which can be met directly or indirectly through one or more subsidiaries. The parent company must own at least 95% of the share capital of the subsidiary, hold at least 95% of the voting rights, and be entitled to at least 95% of the subsidiary's profits and net assets. Article 2(1) of Ministerial Decision No. 301 of 2024 adds that these conditions must be met continuously throughout the relevant tax period. Article 2(2) defines share capital as the nominal issued and paid-up capital, or membership or partnership capital.
- Which companies cannot join a Corporate Tax Group?
- Article 40(1) shuts out several categories. Neither the parent nor the subsidiary can be an exempt person under paragraph (e), and neither can be a qualifying free zone person under paragraph (f) — joining a group would mean giving up the 0% rate on qualifying income, so the two are mutually exclusive by design. All members must be juridical persons and resident persons. Article 3(1) of Ministerial Decision No. 301 of 2024 adds that a member must not be treated as resident for tax purposes in another country under an international agreement in force in the UAE.
- Does a UAE Tax Group have to prepare audited financial statements?
- Yes, and the requirement changed for tax periods commencing on or after 1 January 2025. Article 2(2) of Ministerial Decision No. 84 of 2025 requires a tax group to prepare and maintain audited special purpose financial statements in the form the FTA specifies. FTA Decision No. 7 of 2025 then defines that form as aggregated financial statements, audited under a special purpose framework in accordance with the relevant International Standards on Auditing, and submitted to the FTA no later than nine months from the end of the relevant tax period.
- Are aggregated financial statements the same as IFRS consolidated accounts?
- No, and treating them as the same is the most common mistake we see. Article 3(3)(a) of FTA Decision No. 7 of 2025 states that the standalone statements of an acquiring member should not reflect the accounting implications of business combinations under IFRS 3, or consolidation under IFRS 10, for aggregation purposes. Article 3(3)(b) excludes goodwill, gain on bargain purchase and fair value adjustments recorded in IFRS consolidated accounts. Article 3(3)(d) requires a line-by-line aggregation without eliminating investments against corresponding equity.
- Do tax group members still need standalone financial statements?
- Yes. Article 3(1) of FTA Decision No. 7 of 2025 requires the aggregated financial statements to be built by aggregating the standalone financial statements of the members and eliminating transactions between them. Article 3(4)(d) requires those standalone statements to be prepared in accordance with IFRS or IFRS for SMEs, and Article 3(4)(e) requires uniform accounting policies across the members. The standalone statements are an input to the group set, not something the group set replaces.
- Are group members liable for each other's corporate tax?
- Yes. Article 40(6) of Federal Decree-Law No. 47 of 2022 makes the parent company and each subsidiary jointly and severally liable for the corporate tax payable by the tax group for those tax periods when they are members. Article 40(7) allows that liability to be limited to one or more members for a tax period, but only following approval by the FTA. Article 40(8) also keeps each member responsible for its own withholding tax obligations under Article 45.
- What happens to a subsidiary's losses when it joins a Tax Group?
- Article 42(3) turns unutilised losses of a joining subsidiary into pre-grouping tax losses of the group, usable only against group income attributable to that subsidiary. Article 7(1) of Ministerial Decision No. 301 of 2024 caps the amount at the lower of the group's taxable income attributable to that subsidiary and the amount permitted by the 75% ceiling in Article 37(2). Article 42(4) blocks the group's existing losses from being used against income attributable to a newly joined subsidiary. Article 42(6) leaves unutilised pre-grouping losses with a subsidiary that departs.
- When must the application to form a Tax Group be submitted?
- Article 5(1) of Ministerial Decision No. 301 of 2024 requires the application to form a tax group, or for a subsidiary to join an existing one, to be submitted to the FTA before the end of the tax period in which formation or joining is requested. Article 41(1) of the Corporate Tax Law then dates formation from the beginning of the tax period specified in the application, or from another period the FTA determines. Article 40(3) requires the application to be made by the parent company and each subsidiary seeking membership.
- What has to be reported when a subsidiary leaves the group?
- Article 12 of Ministerial Decision No. 301 of 2024 requires the tax group to notify the FTA within 20 business days from the date the conditions are no longer met, where a subsidiary leaves or the group ceases to exist. Article 13 then requires the departing subsidiary, or the former parent, to prepare standalone financial statements on the same accounting basis and elections the group applied, adopting the group's recorded values as opening values. Article 5 of FTA Decision No. 7 of 2025 repeats that opening-value rule with an exception where accounting standards do not permit it.
- Do transfer pricing rules still apply inside a Tax Group?
- Transactions between members are eliminated under Article 42(1), so they do not drive a separate arm's-length adjustment within the group return. But Article 8(1) of Ministerial Decision No. 301 of 2024 forces the group to calculate income attributable to individual members in four situations — using pre-grouping losses, admitting a new member while the group holds losses, a member benefiting from corporate tax incentives, and using pre-grouping carried forward net interest expenditure. In those cases Article 8(2)(a) requires that attribution to follow Article 34, the arm's length principle.
- Can a tax group member be treated as tax resident abroad?
- No. Article 3(1) of Ministerial Decision No. 301 of 2024 requires a parent company and a subsidiary to be resident persons that are not considered resident for tax purposes in another country or foreign territory under an international agreement in force in the UAE. Article 3(2) then treats a member that becomes resident elsewhere as leaving the tax group from the beginning of the tax period in which that happened. Dual residence under a treaty tie-breaker therefore ends membership for the whole of that period.
- What penalty applies if a Tax Group files its return late?
- Item 7 of the table annexed to Cabinet Decision No. 75 of 2023 charges AED 500 for each month or part month for the first twelve months, and AED 1,000 for each month or part month from the thirteenth month onwards. Item 8 adds a monthly penalty of 14% per annum on unsettled payable tax. Because Article 40(6) makes members jointly and severally liable, those amounts are recoverable from any member, not only from the parent that missed the deadline.
Filed under: corporate tax group uae, tax group, corporate tax, UAE corporate tax, consolidation, tax loss relief, transfer pricing, FTA
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