UAE Corporate Tax Group 2026: The 95% Test & the Benefits

• 14 July, 2026
• By Safwan, Managing Partner
• Corporate Tax

Last reviewed 14 July 2026 by the Exiloz tax team against the UAE legislation in force on that date. Tax law moves — confirm any figure against tax.gov.ae before you act on it.

The year to decide whether your companies file as one

Under Article 40 of Federal Decree-Law No. 47 of 2022, two or more UAE-resident companies can apply to the FTA to form a Tax Group treated as a single taxable person filing one consolidated return. The parent must hold at least 95% of the share capital, voting rights and profit/net-asset entitlement of each subsidiary. Get it right and you offset losses across the group, ignore intra-group transactions and share a single AED 375,000 threshold. Get the eligibility wrong — a QFZP or exempt member, mismatched year-ends — and the group is invalid. If you would rather not handle this in house, this is what our tax group formation covers.

Group owners keep asking the same thing: can I combine my UAE companies for corporate tax? Often yes, and a Tax Group can be a genuine saving. But it is a formal election with strict conditions and a real downside (joint liability). Here is how to decide.

What a Tax Group is

A Tax Group is treated as a single taxable person. The parent files one consolidated corporate-tax return under a single group Tax Registration Number, and transactions between members are generally eliminated. It is an election you apply for on EmaraTax; it does not happen automatically.

The eligibility gate

The 95% test, in detail

The benefits, and the catch

The upsides are real: offset one member's losses against another's profits, ignore intra-group transactions, and file a single return with one AED 375,000 band. The catch is joint and several liability, every member is liable for the group's corporate tax. And because a QFZP cannot join, a group can cost you a valuable 0% free-zone rate if you force a free-zone company in.

How to decide and form

1. Confirm the 95% link: test capital, voting and profit entitlement for each subsidiary.
2. Align year-ends and standards: members must match before you apply.
3. Model the tax: compare grouped vs standalone, including any lost QFZP 0%.
4. Apply on EmaraTax: submit before the end of the tax period you want grouping to start.
5. Plan for liability: accept that all members share the group's tax exposure.

A worked example: loss offset inside a group

Take a Dubai holding structure where the parent earns AED 800,000 of taxable profit and a subsidiary makes a AED 300,000 loss in the same period. Standing alone, the parent pays 9% on everything above AED 375,000 — AED 38,250, while the subsidiary pays nothing and can only carry its loss forward against its own future profits. Grouped, the loss offsets immediately: combined taxable income is AED 500,000, the group applies one AED 375,000 threshold, and the bill is AED 11,250. The election saves AED 27,000 in year one, purely from timing.

When a tax group costs you money

Grouping is not automatically the right answer. The group shares a single AED 375,000 zero-rate band: standalone, each profitable company would enjoy its own. Two healthy companies each earning AED 375,000 pay nothing separately, but AED 33,750 as a group. A Qualifying Free Zone Person cannot join at all without giving up its 0% rate, and under Ministerial Decision No. 84 of 2025 every Tax Group must prepare audited special-purpose financial statements regardless of size, a real compliance cost for small structures. Model both scenarios before you elect; our corporate tax team runs that comparison as a standard exercise.

Common mistakes with the 95% test

The legal basis

Tax Groups are created by Article 40 of Federal Decree-Law No. 47 of 2022, with the FTA’s Tax Groups guide (CTGTGR1) covering formation, the 95% tests and exit. The audited special-purpose financial-statement requirement for groups comes from Ministerial Decision No. 84 of 2025, applying to tax periods from 1 January 2025. Formation runs through EmaraTax and results in a single group Tax Registration Number, one consolidated return and joint filing through the parent, something our accounting and bookkeeping team supports end to end.

What the FTA application involves

1. Confirm eligibility for every member: UAE-resident juridical persons, none exempt or QFZP, all passing the 95% capital, voting and profit tests.
2. Align year-ends and accounting standards before applying, amend articles or change financial years first if needed.
3. Gather evidence: trade licences, shareholding structure, TRNs of members, and financial statements demonstrating the ownership chain.
4. Apply on EmaraTax before the end of the tax period the grouping should first apply to; the parent files on behalf of the group.
5. Receive the group TRN and file one consolidated return per period, with audited special-purpose financial statements under MD 84 of 2025.

Frequently Asked Questions