UAE FTA Releases Guide on Tax Groups in Jan 2024

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Abu Dhabi January 16 2024:

This month, the Federal Tax Authority (FTA) released Corporate Tax Guide CTGTGR1 focusing on tax groups. The guide offers detailed explanations on various aspects of tax group and the conditions for establishing a tax group.

The parent company and its subsidiary/ies can request the FTA to form a tax group, if they are resident juridical persons, with the parent company owning at least 95 per cent of the share capital, voting rights, and entitlement to profits and net assets of the subsidiary/ies. Both entities should not be exempt or qualified free zone persons. Additionally, the parent company and its subsidiary must share the same financial year and follow the same accounting standards for preparing their financial statements.

The juridical person condition clarified that the sole establishments, freelancers, and unincorporated partnerships cannot be part of the tax group.

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