Benefits & Eligibility of Registration as a Tax Group under UAE Corporate Tax Laws

With the introduction of the UAE Corporate Tax Laws under Federal Decree Law No. 47 of 2022 effective 1 June 2023, businesses operating through multiple UAE entities have the option to form a corporate tax group.

The UAE has two main types of tax groups: Value Added Tax (VAT) Groups and Corporate Tax (CT) Groups. For the purpose of this article, we will only cover corporate tax groups.

CT groups require careful planning and structuring of their business activities for compliance efficiency. This framework allows qualifying companies to be treated as one taxable person for corporate taxation purposes, subject to strict ownership, residency and accounting conditions.

In this article, we explain how UAE mandates groups, who is eligible, key benefits and obligations business entities should consider before registering.

What is a Corporate Tax Group?

A corporate tax group is a tax treatment that allows two or more UAE-resident companies to be treated as a single taxable person for corporate tax purposes, subject to approval by the Federal Tax Authority (FTA).

In practice, this means that:

• The group files one tax return
• Tax is assessed at the group level vs per entity
• Compliance is centralized under one representative member of the group
• All members are jointly and severally liable for tax obligations

Typically, a tax group is formed by:

• One parent company and one or more incorporated subsidiaries
• Overall best suited for: operating groups, family conglomerates, regional HQ structures and holding companies

Given members of the group must be juridical resident persons (i.e. legal corporate entities), resident natural persons (i.e. sole proprietors, freelancers, founder personally holding multiple businesses) are excluded even if they are subject to corporate tax individually.

Eligibility Requirements & Conditions to Form a Tax Group

To qualify for group eligibility, all conditions must be met at the same time:

1. Ownership and Control This requirement ensures that the group operates as a single economic unit (vs loosely connected)
   • Parent company must own at least 95% of each subsidiary’s:
     • share capital
     • voting rights
     • entitlement to profits and net assets
2. Residency and Tax Status
   All members must be:
   • UAE tax residents
   • Subject to UAE Corporate tax laws (i.e. must be within scope, required to register AND comply with corporate tax obligations)
3. Accounting Standards and Alignment
   Members must agree to:
   • Have the same financial year
   • Follow the same accounting standards This is required so the group can prepare one consolidated tax return and avoid mismatches in timing or how profits are recorded. This also makes it easier for the companies to fulfill the group’s tax obligations.

Who is not eligible to register as a tax group under UAE CT Law?

Not all businesses are eligible to form a UAE corporate tax group.

The corporate tax regime is limited to companies that meet residency and other legal requirements. In addition, all members must satisfy the 95% ownership requirement—any shortfall, even 94%, makes the group ineligible. These restrictions ensure that only companies under common control can consolidate for corporate tax purposes, preventing the artificial shifting of profits and losses between independently controlled entities.

Other Benefits of Forming a UAE Corporate Tax Group

To summarize the benefits of forming a tax group:

Tax Group Formation: Steps how to Register

Once each company has registered for Corporate Tax individually and confirmed it meets the eligibility requirements, the parent company can apply to form a Corporate Tax Group through the FTA’s EmaraTax portal.

Step 1: Confirm eligibility

Verify that all proposed members satisfy the Corporate Tax Group conditions.

Step 2: Submit the application through EmaraTax

The parent company, acting as the representative member, logs into EmaraTax and submits the Corporate Tax Group application. During the process, the representative member identifies the group members, completes the required declarations, and uploads any supporting documents requested by the FTA.

Step 3: Wait for FTA approval

The FTA reviews the application and may request additional information before making a decision. The Corporate Tax Group only becomes effective from the approved tax period and cannot be applied retrospectively to tax periods that have already been filed.

Step 4: File as a Corporate Tax Group

Once approved, the group receives its own Tax Registration Number (TRN). From that point onward, the representative member is responsible for filing a single consolidated Corporate Tax Return and managing the group’s tax obligations.

Looking for the complete process? Read our step-by-step guide to registering a UAE Corporate Tax Group in this EmaraTax walkthrough.

Ongoing Compliance: Obligations & Requirements for Group Structure

As a single taxable entity, tax groups are required to continuously comply under CT Law.

• File one consolidated tax return
• Maintain group-level accounting records
• Ensure continued eligibility
• Members are jointly and severally liable for penalties and unpaid tax. Each must adhere to a disciplined payment structure as internal agreements do not limit the FTA’s right to collect.
• Notify FTA of any structural changes

As such, the following are considered as joint risks for the parent company and other members.

• Members are jointly and severally liable, meaning each member is fully responsible for the entire tax obligation and not just its own share.
  If the tax liability isn’t paid, the tax administration can collect the full amount from any one member of the group (i.e. penalties can be charged to the entire group.)
• Continued eligibility must be monitored and maintained
• Structural changes must be notified to FTA
• Loss of eligibility dissolves the group

The parent company must prepare consolidated financial statements for the tax group, which can increase compliance costs. As the representative, they are responsible for the administration, including submission of one taxation returns and settlement of the tax liability for the entire group.

Group Restructuring & Changes in Tax Group UAE Composition

A corporate tax group can add new members after it has been formed, provided the new entity meets all eligibility requirements and the change is approved by the FTA. Keep in mind that all conditions must be met before the new entity can be added.

In practice, the representative member must notify the FTA through the EmaraTax portal and submit the updated group details and documentation. The new addition takes effect from the approved tax period and is not considered as retroactive.

What happens if I have to remove the members or in the event of tax group dissolution?

A UAE Corporate Tax Group may remove a member if eligibility conditions are no longer met, such as ownership falling below 95%, restructuring, or voluntary application.

A company leaving the group retains any unused pre-group tax losses, while losses generated during the period registered within the group remain with the tax group.

Certain tax adjustments may apply if assets were transferred within the group before departure. If the group no longer qualifies, it is dissolved and each company resumes filing Corporate Tax returns independently, with the FTA requiring timely updates to avoid administrative penalties.

What is tax group dissolution?

In the event a Corporate Tax Group is dissolved, each company is treated as a separate taxable person from the effective date of dissolution.

Each member becomes responsible for its own Corporate Tax compliance, including filing returns, maintaining records, and meeting future filing deadlines.

If the dissolution results from a company ceasing its business activities, the parent company must apply to the FTA to deregister the group where required.

Businesses should also promptly update their Corporate Tax records, as failing to notify the FTA of relevant changes may result in administrative penalties and future compliance issues.

Calculating Tax Liability, Tax Loss Treatment and Offset for the Entire Group

Calculating Taxable Income at Group Level

In practice, each company still prepares its own financial statements. These records are then combined at group level for tax purposes.

The Parent consolidates the members’ results and eliminates intra-group transactions to produce Tax Group consolidated financial statements.

Afterwards you apply Corporate Tax adjustments (e.g., non-deductible expenses, interest limitation rules, exempt income/reliefs) to arrive at Tax Group taxable income.

Calculating Tax Liability for the Group

Once group taxable income is determined, the group applies the standard tax rates:

• 0% on the first AED 375,000
• 9% on the excess

This will produce the group’s tax payable to be reflected when filing. Remember that all members are jointly and severally liable for the full amount.

For most businesses, the 9% tax rate will apply.

However, for large multinational enterprise groups, they may be subject to additional layer of tax under global minimum tax rules.

Multinational enterprises with global consolidated revenue of EUR 750 million or more are subject to the Domestic Minimum Top-up Tax (DMTT). DMTT brings up the effective tax rate up to 15% through this top up tax, meaning it does not replace the 9% tax rate and will only apply to the difference needed to reach 15%.

How is loss treated in a tax group?

Tax losses in a Corporate Tax Group are treated differently depending on when it happens.

Losses incurred after the group is formed can generally be shared to offset the group’s taxable income, while losses from before joining remain with the original company and cannot be transferred to other members.

The UAE Corporate Tax regime also imposes annual limits on how much taxable income can be offset by losses.

Read our full guide to understand how tax loss relief works for Corporate Tax Groups.

Transfer Pricing Documentation, Arm’s Length Standard and Intragroup Transactions

When companies operate as part of a group, the tax law pays close attention to how transactions between related parties are priced. This is where the transfer pricing rules apply.

Intragroup transactions between members of the same corporate tax group are generally ignored for tax purposes, considering that they are treated as one taxable person. For example, if company A charges company B for management services, there is no impact on taxation at group level because both sit within the same group.

Transactions outside the group however follows a different principle. When a member transact with:

• a related company not in the tax group
• a parent or subsidiary outside the UAE
• a connected person that’s not considered juridical resident persons (e.g. shareholder or related entity)

These transactions must follow transfer pricing rules. Rules state that related parties must price transactions under the arm’s length standard i.e. as if they were dealing with an independent third party.

In practice, the arm’s length principle requires prices, fees, margins or interest rates to reflect market terms. This must be properly documented; transfer pricing documentation may still be required at group level.

When is transfer pricing documentation required?

Even though intragroup transactions within a tax group are ignored for tax calculations, documentation is required when:

• Transactions involve related parties outside the group
• The group is part of a larger multinational structure
• The FTA requests documentation during a review or audit

Documentation typically supports pricing methods used, comparability analysis to market rates, and commercial rationale for the transaction.

Why documentation still matters at group level

In a CT group, FTA may examine whether transactions are correctly classified as intragroup, whether entities should have been grouped at all, or whether profits were shifted outside the UAE. Proper documentation protects the group if structure changes later, and support compliance.

Why Corporate Tax Groups need the Right Support?

Forming a tax group can unlock real efficiency, but only if it is set up correctly and monitored continuously. While tax group formation can be tricky with its shared risks and benefits, structured support matters more than one-off advice.

These are the errors that most often cause issues with the FTA and where our systems and processes help founders stay ahead.

Skrooge is built to support complex compliance decisions like tax registration and filing, combining automation for accuracy with hands-on accountant review for judgment calls. With our multi-year experience and hundreds of clients served, we help founders make the right election, apply it correctly, and sustain compliance over time.

If you’re interested to learn more, visit our website and use our transparent pricing calculator to get a clear, upfront view of what support you might need.

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