FTA Issues New Rules for Tax Group Special Purpose Financial Statements

UAE, 18 August, 2025 : The Federal Tax Authority (FTA) has issued Decision No. 7 of 2025, introducing mandatory requirements for audited special purpose aggregated financial statements for tax groups formed under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022).

The new rules apply to tax periods starting on or after 1 January 2025 and require tax groups to prepare financial statements by aggregating the standalone accounts of the parent and subsidiaries, while eliminating intra-group transactions.

Key Highlights:

• Aggregated statements must comply with IFRS or IFRS for SMEs.

• Business combination adjustments (goodwill, bargain purchase, fair value) are excluded.

• Investments in non-tax group entities to be measured at cost less impairment.

• Aggregated accounts must include a statement of financial position, profit or loss, OCI, and changes in equity; the requirement for a cashflow statement remains uncertain.

• Statements must be presented in AED with uniform accounting policies across all members.

• When a member exits the group, asset and liability values from aggregated accounts must be adopted in standalone accounts for tax computation.

Impact:
The decision significantly changes compliance for tax groups, requiring early preparation for periods ending December 2024 due to the September 2025 filing deadline.