Tax grouping offers two key benefits: consolidated filing (one return for the group rather than one per entity) and the ability to offset losses in one group member against profits in another. To form a tax group, all members must be UAE residents, must be at least 95% owned (directly or indirectly) by a common parent that is itself a UAE resident, and must share the same financial year. Free zone entities cannot form a tax group with mainland entities. Group formation and dissolution require FTA notification.
Pro tip: If you operate multiple UAE entities under common ownership — a trading company, a holding company, and an IP entity, for example — a tax group analysis should be part of your corporate tax planning before your first filing.
See also: Related Party Transaction, Corporate Tax (CT), Corporate Tax Return
