With the introduction of the UAE Corporate Tax regime, businesses now have the option to form a Tax Group—allowing two or more UAE-resident entities to be treated as a single taxable person for corporate tax purposes. This brings significant advantages such as consolidated filing, intra-group transaction neutrality, and simplified compliance. However, many businesses are unsure how to file a single return for such a Tax Group.
This blog provides a detailed step-by-step guide on how to file a consolidated Corporate Tax return for a Tax Group under UAE Federal Decree-Law No. 47 of 2022, along with practical tips to ensure smooth compliance.
What is a Tax Group?
A Tax Group in the UAE consists of a Parent Company and one or more Subsidiary Companies that meet the eligibility criteria and are approved by the Federal Tax Authority (FTA) to be treated as a single taxable entity.
Eligibility Criteria:
- All members must be UAE-resident juridical persons
- The parent company must hold at least 95% of the share capital and voting rights in each subsidiary
- All members must follow the same financial year and accounting standards
- No member of the group can be an exempt or Free Zone Person with 0% tax regime for non-qualifying income
Benefits of Filing a Single Return
- Simplifies compliance and tax administration
- Netting of profits and losses within the group
- No corporate tax on intra-group transactions
- One consolidated return instead of multiple individual returns
Step-by-Step: Filing a Tax Group Return
1. Tax Group Registration with the FTA
Before filing, the parent company must apply to the FTA for group formation. This is done through the FTA’s e-Services portal and requires uploading documents like the group structure chart, articles of association, and board resolutions.
Important: The Tax Group becomes effective only after FTA approval and from the start of the financial year mentioned in the application.
2. Designate a Representative Entity
The parent company typically acts as the Representative Entity and is responsible for filing the group’s single tax return, maintaining records, and ensuring compliance.
3. Gather Consolidated Financial Data
The Representative Entity must consolidate all the group members’ accounts, eliminating intra-group transactions and calculating the group’s overall taxable income.
4. Access FTA e-Services Portal
Log in to the FTA e-Services portal using the Representative Entity’s credentials. Select the appropriate tax group profile and open the Corporate Tax Return Form (yet to be released in full by the FTA but expected soon).
5. Complete the Corporate Tax Return
The return will include:
- Group-wide revenue and expense summary
- Adjustments for exempt income or disallowed deductions
- Tax loss relief within the group
- Final taxable income and corporate tax liability
6. Attach Required Supporting Documents
Upload audited consolidated financial statements, tax computations, intra-group transaction records, and any other FTA-requested documentation.
7. Review, Submit, and Pay
Once the return is validated, submit it before the deadline—within 9 months from the end of the financial year. Payment must be made online via the FTA portal.
Key Compliance Considerations
- Retain records for at least 7 years
- Submit a revised return if errors are identified
- Notify the FTA of any changes to group structure
- Non-compliance may lead to penalties or loss of group status
How PEAK Business Consultancy Services Can Help
Setting up and maintaining a Tax Group involves multiple regulatory, financial, and operational elements. That’s where PEAK Business Consultancy Services comes in.
As expert VAT and Corporate Tax consultants in the UAE, PEAK BCS offers:
- Tax Group feasibility analysis and registration assistance
- Consolidated financial statement preparation
- FTA filing support and compliance audits
- Long-term strategic tax structuring
For businesses seeking a reliable tax advisory partner, PEAK Business Consultancy Services is your go-to choice. Let our experts simplify tax complexities while you focus on growing your business.
Conclusion
Filing a single return for a Tax Group can provide substantial advantages, but it demands careful preparation, accurate consolidation, and deep knowledge of FTA compliance requirements. With the right professional support, businesses can leverage this regime for tax efficiency and administrative ease.
Contact PEAK Business Consultancy Services today to get expert advice on forming and managing your UAE Tax Group effectively.
