The UAE Ministry of Finance has released Ministerial Decision No. 301 of 2024 regarding the oversight of tax groups under the Corporate Tax Law on 9 December 2024.
The decision outlines several important areas, such as ownership requirements and regulations for transactions that occur before the formation or joining of a tax group. It also provides relief for pre-grouping tax losses and offers guidelines on business restructuring and related matters.
One of the updates is the introduction of a new definition for “Financial Statements.” A complete set of statements as specified under the Accounting Standards applied by the Taxable Person, which includes, but is not limited to, statement of income, statement of other comprehensive income, balance sheet, statement of changes in equity and cash flow statement.
Additionally, the decision brings clarifications regarding the application of the arm’s length principle, the documentation needed for transfer pricing, and the calculation of taxable income for a tax group.
Further updates focus on the handling of pre-grouping tax losses, as well as rules for carrying forward net interest expenses.
This Decision replaces Ministerial Decision No 125 of 2023 and shall apply to Tax Periods commencing on or after 1 January 2025.
