Ministerial Decision No. 301 of 2024 · UAE Federal
Replaces Ministerial Decision No. 125 of 2023 for tax periods starting on or after 1 January 2025, setting the rules for forming and operating a corporate tax group, including ownership conditions, intra-group transactions, loss relief and business restructuring within the group.
Ministerial Decision No. 301 of 2024 is the current rulebook for Corporate Tax groups under Articles 40 to 42 of the Corporate Tax Law (Federal Decree-Law No. 47 of 2022). It was issued on 9 December 2024, came into effect the day after publication, applies to Tax Periods commencing on or after 1 January 2025, and repeals Ministerial Decision No. 125 of 2023, which continues to govern earlier periods. Most of the 2023 text is carried over; the changes tighten the use of pre-grouping losses and interest carry-forwards and simplify the residence evidence.
Articles 2 and 3 keep the membership tests: the Article 40(1) conditions must be met continuously throughout the Tax Period; share capital means nominal issued and paid-up capital or membership or partnership capital; Parent and Subsidiaries must be Resident Persons not treaty-resident elsewhere, and a member that becomes resident elsewhere leaves from the start of that period. The 2023 requirement to hold a foreign tax authority confirmation for foreign-incorporated or foreign-managed members has been dropped.
Article 5 keeps the timing rule: the application to form or join a group, and an application to replace the Parent under Article 40(12), must be submitted before the end of the relevant Tax Period, and a newly incorporated Subsidiary or replacement Parent may join from incorporation. Articles 4 and 6 preserve the rules on non-elimination of transactions where a pre-grouping loss was deducted and on eliminating transactions between Subsidiaries and related valuation adjustments.
Article 7 limits a Subsidiary's pre-grouping Tax Losses to the lesser of the group income attributable to it and the Article 37(2) cap, used before the group's own losses. Article 8 is where the decision changes most. The group must compute member-level Taxable Income on an arm's length basis, and disclose intra-group dealings under Article 55(1), where it opts to use a member's pre-grouping losses, where a new member joins a group that has unutilised losses, where a member enjoys a tax incentive, or where it opts to use a member's pre-grouping Net Interest Expenditure. Pre-grouping losses and interest carry-forwards must be used to the fullest extent possible before any remainder is carried forward, and they are forfeited if the group fails to compute the member's attributable income and uses less than it could have.
Articles 10 and 11 treat intra-group mergers and transfers as internal, with no Business Restructuring election required and the Article 42(10) claw-back if an asset later leaves the group. Article 12 keeps the 20-business-day notification to the FTA when a Subsidiary leaves or the group ceases to qualify. Article 13 requires a departing Subsidiary or former Parent to prepare standalone Financial Statements on the same accounting basis and elections as the group, using the group's recorded values as opening values. Articles 14 to 16 deal with repeal, application to periods from 1 January 2025, and commencement.
Parent Companies and Subsidiaries forming, joining, operating or leaving a Corporate Tax group under Article 40 of the Corporate Tax Law for Tax Periods commencing on or after 1 January 2025: Resident juridical persons with at least 95% common ownership, profit and asset entitlement, the same Financial Year and accounting standards.
English official text in 16 articles. Open the full text or jump to a provision:
| Article 2 | The Article 40(1) conditions must be met continuously throughout the Tax Period; share capital means the nominal issued and paid-up capital or Membership or Partnership Capital of each Subsidiary. |
| Article 3 | Parent and Subsidiary must be Resident Persons not treated as resident in another country under a tax treaty; a member becoming resident elsewhere is treated as leaving from the beginning of that Tax Period. |
| Article 4 | Intra-group transactions are not eliminated to the extent a member recognised a deductible loss on them before grouping, until the loss is reversed in full; related income is included up to the loss previously deducted. |
| Article 5 | Applications to form or join a Tax Group, or to replace the Parent Company under Article 40(12), must be submitted before the end of the relevant Tax Period; a newly established Subsidiary or replacement Parent may join from incorporation. |
| Article 7 | A Subsidiary's pre-grouping Tax Losses offset group Taxable Income only up to the lesser of the income attributable to that Subsidiary and the Article 37(2) limit, and are used before the group's own carried-forward losses. |
| Article 8(1)–(2) | The group computes member-level Taxable Income under Article 34 and discloses intra-group and related-party dealings under Article 55(1) where it uses a member's pre-grouping losses, a new member joins a group with unutilised losses, a member has tax incentives, or it uses pre-grouping Net Interest Expenditure. |
| Article 8(3)–(6) | Pre-grouping Tax Losses and pre-grouping Net Interest Expenditure must be used to the fullest extent possible before any remainder is carried forward, and are forfeited if the group does not compute the member's attributable income and uses less than it could have. |
| Articles 10–11 | A member transferring its whole Business to another member remains in the group until it ceases to exist, no Article 27 election is needed, and income on intra-group transfers that would qualify under Article 26 or 27 is not taken into account, subject to the Article 42(10) claw-back. |
| Article 12 | The Tax Group must notify the FTA within 20 business days of a Subsidiary leaving or the group ceasing to meet the conditions of Article 40 or the decision. |
| Article 13 | A departing Subsidiary or former Parent prepares standalone Financial Statements on the same accounting basis and elections as the group, adopting the group's recorded values as opening values. |
| Articles 14–15 | Repeals Ministerial Decision No. 125 of 2023, which continues to apply to Tax Periods that commenced before 1 January 2025; this decision applies to Tax Periods commencing on or after that date. |
No penalty is set in the decision itself, but Article 8 provides that pre-grouping Tax Losses and pre-grouping Net Interest Expenditure are forfeited where the group fails to compute the member's attributable income and under-uses them. Failures to notify the FTA within 20 business days, to keep records or to file fall under Cabinet Decision No. 75 of 2023.
Parent-subsidiary groups we administer that want a single Corporate Tax return apply this decision from their 2025 Tax Period. Our starting checks are the 95% ownership test held throughout the year, common Financial Year and accounting framework, and the timing rule in Article 5: the application has to be lodged on EmaraTax before the year ends, which we diarise at the start of each period. For groups bringing in a Subsidiary with pre-grouping losses or an interest carry-forward, Article 8 now obliges us to compute that member's standalone Taxable Income on arm's length terms and use the losses in full, or lose them, so we keep intra-group pricing documented even inside the group. We also tell clients that a sale of a Subsidiary, a change of Financial Year or a move of management abroad breaks the group from the start of the period and triggers the 20-business-day notice, and we prepare the exit statements on the group's carrying values as Article 13 requires.
| Repeals | Ministerial Decision No. 125 of 2023 |
| Cites | Corporate Tax Law · Tax Group Decision (2023) |
“Cites” and “Cited by” are built automatically from references in the full texts held in this library; they cover only instruments in the library.
Tax Group Decision (2023)
Set the conditions for forming and maintaining a corporate tax group between a parent company and its subsidiaries, the treatment of intra-group transactions and pre-grou…
Corporate Tax Law
Imposes federal corporate tax on the taxable income of UAE companies and businesses at 0% up to a Cabinet-set threshold and 9% above it, with 0% on the qualifying income …
Audited Financial Statements Decision (2025)
For tax periods starting on or after 1 January 2025, requires audited financial statements from taxable persons (other than tax groups) with revenue above AED 50 million …
Accounting Standards Decision
Requires financial statements for corporate tax to be prepared under IFRS, allows IFRS for SMEs where revenue does not exceed AED 50 million, and permits the cash basis o…
Interest Deduction Limitation Decision
Implements Article 30 of the Corporate Tax Law on limiting net interest deductions to a percentage of EBITDA, defines how EBITDA is computed for the rule, and exempts tax…
Qualifying Group Transfers Decision
Lets a transferor elect in its tax return to apply Article 26 of the Corporate Tax Law so that transfers of assets or liabilities within a qualifying group are tax neutra…
Business Restructuring Relief Decision
Sets the conditions for tax-neutral transfers of a whole business or an independent part of it in exchange for shares or other ownership interests, limits other considera…
Corporate Tax Penalties Decision
Lists the administrative penalties for corporate tax violations: AED 10,000 for failing to keep records (AED 20,000 on repeat), AED 500 per month rising to AED 1,000 for …
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