Conditions for Forming the Tax Group by Subsidiaries of a Government Entity for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
Issued 16 August 2023 – (Effective from the date of publishing in the Official Gazette)
The Chairman of the Board of Directors of the Federal Tax Authority has decided:- Having reviewed the Constitution,
- Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments,
- Federal Decree-Law No. 28 of 2022 on Tax Procedures,
- Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses,
- Cabinet Decision No. 74 of 2023 on the Executive Regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures,
- Ministerial Decision No. 125 of 2023 on Tax Group for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses,
- Decision of the Chairman of the Board of Directors No. 9 of 2021 on the Delegation of the Vice Chairman of the Board of Directors of the Federal Tax Authority, and
- Pursuant to the approval of the Board of Directors on the policy for the Conditions for Forming Tax Groups by Subsidiaries of a Government Entity, at the twenty-seventh meeting held on 22 June 2023.
Article 1 – Definitions
The words and expressions contained in this Decision shall have the same meaning assigned against each in Federal Decree-Law No. 47 of 2022 referred to above, unless the context otherwise requires.Article 2 – Conditions for Forming a Tax Group
For the purposes of Clause 2 of Article 40 of Federal Decree-Law No. 47 of 2022 referred to above, Subsidiaries in which a Government Entity directly or indirectly owns at least 95% (ninety-five percent) ownership interest as specified in paragraphs (b), (c) and (d) of Clause 1 of Article 40 of the Corporate Tax Law may form a Tax Group, subject to the following conditions:- The conditions prescribed in Clause 1 of Article 40 of Federal Decree-Law No. 47 of 2022 referred to above are satisfied.
- The Government Entity exempt under paragraph (a) of Clause 1 of Article 4 of the Decree-Law is not a member of the Tax Group.
- A Subsidiary of a Government Entity is not a member of the Tax Group where such Subsidiary is an exempt person.
- The Government Entity appoints one of the Subsidiaries as representative of the Tax Group.
Article 3 – Submitting an Application to Form a Tax Group
The Subsidiary appointed as representative of the Tax Group shall submit an application to the Authority to form the Tax Group.Article 4 – Abrogation of Conflicting Provisions
All provisions contrary to or inconsistent with the provisions of this Decision shall be abrogated.Article 5 – Implementation of the Decision
This Decision shall be published in the Official Gazette and shall come into force as of the date of its publication.Important Notice
The above extract has been provided for reference only and is based on information available in the public domain at the time of publication, which is subject to change. This does not constitute any form of advice or recommendation and therefore cannot be relied on to cover specific situations. We highly recommend that you consult with a qualified tax advisor in the UAE for personalized guidance based on your specific business circumstances. We accept no duty of care or liability for any loss occasioned to any person acting or refraining from action as a result of any material in this publication. Please refer to the following resources for the official and up-to-date information on the UAE Corporate Tax legal framework:- UAE Ministry of Finance: https://mof.gov.ae/tax-legislation/; and
- UAE Federal Tax Authority: https://tax.gov.ae/en/Legislation.aspx