Tax Group in Corporate Tax Law
In the realm of Corporate Tax Law in the United Arab Emirates (UAE) for the year 2023, a Tax Group refers to a collective of companies that are regarded as a unified entity for taxation purposes. This entails the amalgamation of profits and losses from all constituent companies within the group, subject to taxation as a single consolidated amount.
To qualify as a Tax Group, the participating companies must satisfy the following conditions

- They must all have UAE residency status.
- They must be under common control, which entails one company holding a majority of shares in the other companies or having control over at least 95% of their voting rights.
- They must share the same fiscal year.
- They must jointly submit a single tax return representing the entire group.
The advantages of establishing a Tax Group include:

- The ability to offset losses incurred by one company against the profits of another within the group.
- Eligibility to claim foreign tax credits for taxes paid on earnings generated outside of the UAE.
- Access to specific tax incentives exclusively accessible to Tax Groups.
The disadvantages of forming a Tax Group encompass:

- The necessity to adhere to more intricate tax regulations.
- The potential liability for tax obligations of other companies within the group.
The decision to create a Tax Group should be carefully evaluated on a case-by-case basis. It is advisable to consult with a tax advisor to determine if establishing a Tax Group aligns with your business objectives.
Some additional considerations pertaining to Tax Groups in the context of UAE Corporate Tax Law for 2023:

- A formal written agreement among the involved companies must be in place to establish the Tax Group.
- The agreement should delineate the terms of the Tax Group, including the allocation of profits and losses, group management, and individual company responsibilities.
- The Tax Group must be registered with the Federal Tax Authority (FTA).
- The FTA has issued Ministerial Decisions offering comprehensive guidance on the formation and operation of Tax Groups in the UAE, accessible on the FTA website.
The decision to create a Tax Group should be carefully evaluated on a case-by-case basis. It is advisable to consult with a tax advisor to determine if establishing a Tax Group aligns with your business objectives.