If you own several UAE companies, Corporate Tax lets you treat them as one taxable person. A tax group files a single return, ignores transactions between its members, and offsets one member's losses against another's profits. It is a powerful simplification, but it is not right for every group.
Who can form a tax group
A UAE resident parent company and its subsidiaries can form a tax group if:
- The parent owns at least 95% of each subsidiary's share capital and voting rights, and is entitled to at least 95% of its profits and net assets, directly or through other group members
- All members are UAE resident juridical persons, which can include a foreign company effectively managed and controlled in the UAE
- No member is an exempt person or a Qualifying Free Zone Person
- All members have the same financial year and use the same accounting standards
The rules are in Article 40 of the Corporate Tax Law and, for tax periods starting on or after 1 January 2025, Ministerial Decision No. 301 of 2024, which replaced Ministerial Decision No. 125 of 2023.
What you gain
- One return for the whole group, filed by the parent
- Intragroup transactions are eliminated, so management fees, recharges and asset transfers between members do not create taxable income
- Losses are pooled: a loss in one member reduces profits in another in the same year
- One AED 375,000 0% band and one interest limitation calculation for the group
What you give up
- Joint and several liability. Every member is liable for the group's Corporate Tax.
- One set of group financial statements. The group must prepare aggregated financial statements, which must be audited if group revenue exceeds AED 50 million.
- Pre-grouping losses are restricted. Losses a member brought into the group can only be used against income attributable to that member, calculated at arm's length.
- Small Business Relief is assessed on group revenue, so smaller members may lose access to it.
- Leaving has consequences. When a member leaves, it needs standalone financial statements, and asset transfers within the past two years can be clawed back.
Timing
An application to form, join or change a tax group is made on EmaraTax, and must be submitted before the end of the tax period from which it should take effect. For a calendar-year group, that means by 31 December 2026 for the 2026 period.
Not ready for a full group?
If you only want to move assets or liabilities between companies without tax, qualifying group relief may be enough. It applies at 75% common ownership and allows transfers at tax value, without forming a tax group, as long as the asset stays in the group for two years.
How to decide
- Map your ownership and check the 95% test for each company.
- Model the tax with and without grouping, including losses and the AED 375,000 band.
- Check the costs: audit, consolidation and joint liability.
- Consider future plans: a member you may sell or bring in an outside investor for will need to leave.
- Apply in time if grouping makes sense.
How Dreambooks helps
Dreambooks runs several companies in one account with shared charts of accounts, eliminates intercompany transactions and produces aggregated group financial statements, so you can compare the grouped and ungrouped positions before you decide.
Official sources
- WAM: Ministry of Finance announces amendments to ministerial decisions on tax groups and participation exemption
- FTA: Corporate Tax legislation
This article is general information as of July 2026, not tax advice. Check the Corporate Tax Law, Ministerial Decision No. 301 of 2024 and the latest FTA guidance, or speak to your tax adviser, before acting.