Corporate Tax Group Formation

A corporate tax group is where two or more UAE-resident corporations under common ownership are treated as a unified taxable entity. This means you’ll have one tax registration number (TRN) and submit a single return making compliance easier and reporting cleaner. This setup is ideal for large groups, holding structures, or family-owned companies with several subsidiaries operating in the UAE.

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Who Can Form a Corporate Tax Group?

To qualify for corporate tax group formation in the UAE, the following conditions must be met:

The parent entity must own at least 95% of the shares and the voting rights of the subsidiaries.
All the companies must be resident in the UAE for tax purposes.
Each company must adopt the same accounting standards (IFRS) and financial year.
No company is to be exempt or qualifying free zone companies to enjoy the 0% corporate tax.

Why Form a Corporate Tax Group?

The benefits of forming a tax group in UAE include:

Simplified compliance – One return rather than numerous.
Tax efficiency – Balances between gains and losses.
Centralized management – Better control and reporting for all organizations.
Reduced administrative burden – Fewer documents, one FTA submission.
Simplified tax position – Simplifies your corporate tax profile as a whole.

How to Establish a Corporate Tax Group

Following is a concise overview of the steps:

Check eligibility – Confirm ownership and financial alignment.
Collect documents – Trade licenses, MOAs, and financial statements.
Submit an application – Apply online through the FTA portal using the parent company account.
Supporting documents – Proof of ownership, resolutions, and authorizations.
Get approval and TRN – Your group is allotted a single tax registration number upon approval.

Documents Typically Required

To request UAE corporate tax group formation, the following documents are required:

Trade licenses and company documents (MOA/AOA)
Ownership chart showing 95% control
Audited financial statements
Photocopy of passport and Emirates ID of authorized signatories
Board resolutions and Power of Attorney (if applicable)

What Happens After Approval?

Once your group formation has been approved by the FTA:

The representative member is the parent company.
It files the corporate tax return for the whole group.
The group is assigned only a single TRN.
All members remain collectively and severally liable for paying the group's tax dues unless exempted by the FTA.

If a company vacates or ceases to be eligible, it must inform the FTA in 20 business days.
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Can the Group Be Dissolved?

Yes, if there's a change of ownership or if one party is no longer able to meet the 95% rule, the tax group may be cancelled.

Each company will then need to register separately with the FTA and file separately once more.
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How We Help

Corporate Tax Group Formation in the UAE is accomplished with careful planning and compliance checks.

Our experts at CorporateTaxUAE.com will:

Verify your structure and check your eligibility.
Secure FTA registration from initiation to completion.
Representatives of the authority in order to get them approved.
Guides you through ongoing group compliance and return submission.

Frequently Asked Questions (FAQs)

What is a corporate tax group?

It's when multiple UAE companies owned by the same entity are taxed as a single company.

Who can form a tax group?

Companies with at least 95% common ownership, same accounting year, and no exempt status.

Why is a group better?

You make one return and are able to offset profits and losses of members.

Can free zone companies be a group?

Only if not qualifying free zone entities benefiting from the 0% charge.

Who files the company tax return for the group?

The group is represented by the parent company and files a single return for the group.

What if a company leaves the group?

The group needs to inform the FTA, and the individual company will need to register separately.

How long does it take to be approved?

Typically, around 10 to 20 business days, depending upon FTA processing time.

Does tax liability get shared among the group members?

Yes, unless FTA gives relief specifically, all members become jointly liable.