Benefits and consolidated filing rules for Corporate Tax Group Formation
Benefits and consolidated filing rules for Corporate Tax Group Formation
UAE resident companies can form a Tax Group and file a single consolidated Corporate Tax return.
Under Article 40 of the Corporate Tax Law, two or more UAE juridical persons that are at least 95% commonly owned (directly or indirectly) may elect to form a Tax Group.
Key implications for CT taxpayers:
- All intra-group transactions are disregarded for CT purposes (no taxable gains or losses on transfers within the group).
- The transfer pricing controls become irrelevant on the disregarded intra-group transactions
- Tax losses of one member can be offset against the taxable income of other members.
- Only one consolidated return and payment is required for the entire group, significantly simplifying compliance and administration.
- Aggregate Audited Financial Statements must be maintained by the Tax Group.
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