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UAE Corporate Tax Fundamentals/Group Relief & Tax Groups
6 min

Tax Group Formation

Forming a formal tax group treated as a single taxpayer.

Tax Group Formation

What is a Tax Group?

A tax group is treated as a single taxable person. All profits and losses of group members are consolidated.

Conditions

  1. Parent is a resident juridical person
  2. Subsidiary is a resident juridical person
  3. Parent owns 75%+ of subsidiary
  4. Same financial year
  5. Same accounting standards
  6. FTA approval required

How It Works

  • The parent is the representative member
  • The parent files a single consolidated tax return
  • All transactions between group members are eliminated
  • Losses of one member automatically offset profits of another

Advantages

  • Simplified compliance (one return)
  • Automatic loss offset within the group
  • Cash flow benefits

Disadvantages

  • Joint and several liability
  • Transfer pricing rules still apply
  • Complex to administer

Application

Submit an application to the FTA via EmaraTax. The FTA may approve, reject, or impose conditions.

Key takeaways

  • A tax group is a single taxable person
  • The parent files a consolidated return
  • 75% ownership and FTA approval required

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This lesson is general educational content, not individualized tax or legal advice. Always consult a qualified professional for your specific situation.