As part of the recent updates under the UAE Corporate Tax Law, businesses may now form a tax group for corporate tax purposes, as outlined in Article 40 of the legislation. This option provides opportunities for simplified compliance and potential tax efficiencies.
To assist you in understanding and preparing for this, we would like to highlight the key requirements for forming a tax group:
What are Tax groups as per the Corporate tax law?
As per the Federal Decree Law no. 47 of 2022, Article 40 mentions that the Parent company and its subsidiaries have to be in UAE.
The following conditions have to be met to form a Tax Group –
- The Parent company has to own 95% or more of share capital and also entitled its subsidiaries profits & net assets.
- The parent company & subsidiaries have to be a tax resident person in UAE to form tax group.
- Neither parent company nor subsidiary can be an Exempt person or Qualifying Free Zone Person.
- Both the Parent company & its subsidiaries must have the same FY and prepare their financial statements using the same accounting standards (as per the Ministerial Decision no. 114 of 2023.)
The Parent company and subsidiary company have to meet all the above conditions for in every tax period to continue to exist as a Tax group. If at any point they cease to exist as a tax group and then once again meet the above conditions in the future, then they can readmit themselves as a tax group with the FTA.
Why Form a Tax Group?
Creating a tax group may offer significant benefits, including consolidated tax filings, offsetting losses within the group, and improved cash flow management.
How We Can Help:
Our team is here to guide you through the process, ensuring compliance with all regulations while optimizing the benefits for your business. We can assist with:
- Assessing eligibility for forming a tax group.
- Preparing the necessary documentation and application for submission.
- Ensuring ongoing compliance with corporate tax regulations.
If you have any questions or need assistance in forming a tax group, please do not hesitate to contact us.
To know more about Tax Group under CT law, visit our website using the below links:
- https://www.spectrumaccounts.com/uae-tax-group-part-2-a-deep-dive-into-tax-groups/
Why Choose Spectrum Auditing?
At Spectrum Auditing, we go beyond just being an auditing firm; we’re your trusted partner in navigating the ever-evolving landscape of UAE regulations. Here’s what sets us apart:
- Unparalleled Expertise: Our team consists of accredited auditors, management accountants, consultants with in-depth knowledge of UAE laws, ensuring your business remains compliant.
- Streamlined Solutions: We take a comprehensive approach, guiding you through every step of the process, from risk assessment to filing reports.
- International Recognition: Be audits or any type of compliance, we adhere to the highest standards (ISA, IAS, IFRS), providing global credibility.
- Personalized Support: We understand every business is unique. We tailor our services to address your specific needs and answer any questions you may have.
Partner with Spectrum Auditing today. Let’s focus on your success, while you focus on what you do best – running your business.
Contact us today for a consultation at +971 4 2699329 or email [email protected] to get all our queries addressed.
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