Can a group of UAE companies form a Tax Group for tax purposes?
Yes, UAE resident companies can form a Tax Group and be treated as one entity for tax purposes if the UAE parent company owns at least 95% of the shares and voting rights of each company. All companies in the group must meet certain conditions and use the same financial year and accounting standards.
Example: Company X owns, 20% of company Y, and 100% of Company Z. Company Z owns 80% of the shares of Company Y. Because Company X indirectly owns 100% of the shares of Company Y (80% via Company Z), it can form a Tax Group with both Company Y and Company Z.
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