Who files the Corporate Tax return for a Tax Group?
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The Parent Company files one Corporate Tax return covering the whole Tax Group, not each subsidiary separately.
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The detail
Under Article 53(7) of the Corporate Tax Law, the Parent Company must file the Tax Return with the Authority on behalf of the Tax Group, since the Tax Group is treated as a single Taxable Person represented by the Parent Company. If a Subsidiary leaves the Tax Group or the Tax Group ceases, that Subsidiary must file its own standalone Tax Return using its own Tax Registration Number.123
What the law says
- A Taxable Person must file a Tax Return within 9 months of the end of the Tax Period, and for a Tax Group this obligation falls on the Parent Company.1
- A Tax Group formed under Article 40 is treated as a single Taxable Person represented by the Parent Company, which handles the Group's filing, assessment and payment obligations.2
What it depends on
- If a Subsidiary no longer meets the Tax Group conditions, it is treated as leaving from the start of that Tax Period and must file its own separate return for that period.3 Based on FTA guidance
- A Subsidiary leaving the Tax Group need not deregister for Corporate Tax and continues using its own Tax Registration Number for standalone filings, per FTA guidance.3 Based on FTA guidance
Check before you rely on it
- Confirm which entity is currently designated as Parent Company of the Tax Group
- Check whether any Subsidiary has ceased to meet the 95% ownership/voting/profit conditions during the period
Sources (3) — read the official text
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Article 53 – Tax Returns
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Article 53 – Tax Returns 1. Subject to Article 51 of this Decree-Law, a Taxable Person must file a Tax Return, as applicable, to the Authority in the form and manner prescribed by the Authority no later than (9) nine months from the end of the relevant Tax Period, or by such other date as directed by the Authority. Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 55 2. The Tax Return shall include at least the following information, as applicable: a. The Tax Period to which the Tax Return relates. b. The name, address and Tax Registration Number of the Taxable Person. c. The date of submission of the Tax Return. d. The accounting basis used in the financial statements. e. The Taxable Income for the Tax Period. f. The amount of Tax Loss relief claimed under Clause 1 of Article 37 of this Decree-Law. g. The amount of Tax Loss transferred under Article 38 of this Decree-Law. h. The available tax credits claimed under Articles 46 and 47 of this Decree-Law. i. The Corporate Tax Payable for the Tax Period. 3. A Taxable Person shall provide the Authority with any such information, documents or records as shall be reasonably required by the Authority for the purposes of implementing the provisions of this Decree-Law. 4. As an exception to the provisions of this Article and any other relevant provision of this Decree-Law, the Minister may prescribe the form and manner in which a Tax Return and other information is to be filed with the Authority by a Taxable Person where the disclosure of information may impede national security or may be contrary to the public interest. 5. The Authority may request a Person under paragraphs (e), (f), (g), (h) and (i) of Clause 1 of Article 4 of this Decree-Law to submit a declaration. 6. The Authority may, by notice or through a decision issued by the Authority, request the authorised partner in an Unincorporated Partnership that has not had an application approved under Clause 8 of Article 16 of this Decree-Law to be treated as a Taxable Person to file a declaration on behalf of all the partners in the Unincorporated Partnership. 7. The Parent Company must file a Tax Return to the Authority on behalf of the Tax Group. Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 56
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Article 40 – Tax Group
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Article 40 – Tax Group 1. A Resident Person, which for the purposes of this Decree-Law shall be referred to as a “Parent Company”, can make an application to the Authority to form a Tax Group with one or more other Resident Persons, each referred to as a “Subsidiary” for the purposes of this Chapter, where all of the following conditions are met: a. The Resident Persons are juridical persons. b. The Parent Company owns at least 95% (ninety-five percent) of the share capital of the Subsidiary, either directly or indirectly through one or more Subsidiaries. c. The Parent Company holds at least 95% (ninety-five percent) of the voting rights in the Subsidiary, either directly or indirectly through one or more Subsidiaries. d. The Parent Company is entitled to at least 95% (ninety-five percent) of the Subsidiary's profits and net assets, either directly or indirectly through one or more Subsidiaries. Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 46 e. Neither the Parent Company nor the Subsidiary is an Exempt Person. f. Neither the Parent Company nor the Subsidiary is a Qualifying Free Zone Person. g. The Parent Company and the Subsidiary have the same Financial Year. h. Both the Parent Company and the Subsidiary prepare their financial statements using the same accounting standards. 2. Notwithstanding paragraph (e) of Clause 1 of this Article, one or more Subsidiaries in which a Government Entity directly or indirectly owns at least a 95% (ninetyfive percent) ownership interest as specified in paragraphs (b), (c) and (d) of Clause 1 of this Article can form a Tax Group, subject to the conditions to be prescribed by the Authority. 3. An application made under Clause 1 of this Article shall be made to the Authority by the Parent Company and each Subsidiary seeking to become members of the Tax Group. 4. A Tax Group formed under Clause 1 of this Article is treated as a single Taxable Person for the purposes of this Decree-Law, represented by the Parent Company. 5. The Parent Company shall comply with all obligations set out in Chapters Fourteen, Sixteen and Seventeen of this Decree-Law on behalf of the Tax Group. 6. The Parent Company and each Subsidiary shall be jointly and severally liable for Corporate Tax Payable by the Tax Group for those Tax Periods when they are members of the Tax Group. 7. The joint and several liability under Clause 6 of this Article for a Tax Period can be limited to one or more members of the Tax Group following approval by the Authority. 8. The Parent Company and each Subsidiary shall remain responsible for complying with the provisions under Article 45 of this Decree-Law. 9. A Subsidiary can join an existing Tax Group following submission of an application to the Authority by the Parent Company and the relevant Subsidiary. 10. A Subsidiary shall leave the Tax Group in the following circumstances: a. Following approval by the Authority of an application by the Parent Company and the relevant Subsidiary. b. Where the relevant Subsidiary no longer meets the conditions to be a member Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 47 of the Tax Group as specified in Clause 1 of this Article. 11. A Tax Group shall cease to exist in any of the following circumstances: a. Following approval by the Authority of an application by the Parent Company. b. Where the Parent Company no longer meets the conditions to form a Tax Group as specified in Clause 1 of this Article, subject to the provisions of Clause 12 of this Article. 12. The Parent Company of a Tax Group can make an application to the Authority to be replaced by another Parent Company without a discontinuation of the Tax Group, in any of the following circumstances. a. The new Parent Company meets the conditions under Clause 1 of this Article relating to the former Parent Company. b. The former Parent Company ceases to exist and the new Parent Company or a Subsidiary is its universal legal successor. 13. Notwithstanding Clauses 11 and 12 of this Article, the Authority may, at its discretion, dissolve a Tax Group or change the Parent Company of a Tax Group based on information available to the Authority, and notify the Parent Company of such action taken.
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Read the article
• 6.5. the request should specify the Tax Period when the change is effective. The request should be filed before the end of the Tax Period for which the replacement of the Parent Company is requested;125 or The former Parent Company ceases to exist and the new Parent Company or a Subsidiary is its universal legal successor, for instance as a result of a merger or other transfer under universal title. 126 Although an application to form a Tax Group can generally only be submitted once the relevant conditions are met, a request to replace a Parent Company in such circumstances can be made while a transfer under universal title Is being prepared. Once approved, the continuation of the Tax Group applies as of the date when the transfer to the universal legal successor occurs and is conditional on that transfer being completed. Compliance impact of changes in a Tax Group If the conditions for a Tax Group are not met continuously throughout a Tax Period in relation to a specific Subsidiary, that Subsidiary is considered to leave the Tax Group as of the start of that Tax Period.127 As a result, it would need to file a Tax Return as a separate Taxable Person for that Tax Period and is liable for its own Corporate Tax Payable. If a Tax Group did not realise the conditions for a Tax Group were not met in relation to a certain Subsidiary, it is possible that the Tax Group will have filed Tax Returns as if the Subsidiary was still part of the Tax Group. This implies that such Tax Returns were incorrect and would need to be corrected once the error has been identified. Any Administrative Penalties relating to filing an incorrect Tax Return of the Tax Group and, where applicable, underpayment of Corporate Tax shall be the liability of entities that remain part of the Tax Group. It is also possible that Taxable Persons did not file a Tax Return as they mistakenly thought that the conditions for the Tax Group were met for that Tax Period. In such case, these entities could also be subject to Administrative Penalties for failure to file a Tax Return. 6.5.1. Tax Deregistration A Subsidiary leaving the Tax Group but which does not cease to exist is not required to deregister for Corporate Tax purposes. The Subsidiary’s own Tax Registration Number shall be used for its standalone Tax Returns, paying Corporate Tax and any other compliance obligations. 125 Article 5(1) and 5(2) of Ministerial Decision No. 125 of 2023. 126 Article 40(12)(b) of the Corporate Tax Law. 127 Article 41(3) of the Corporate Tax Law. Corporate Tax Guide | Tax Groups | CTGTGR1 53
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Written by AI from the FTA sources above and checked before display. Not tax advice or official FTA information - confirm with a tax adviser before you act. Full disclaimer
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