UAE: FTA issues guidance on tax group financial reporting, audit rules

Tax Groups are required to prepare Aggregated Financial Statements under Article 3 of Ministerial Decision No. 114 of 2023. This requirement applies to all Tax Periods commencing on or after 1 June 2023.

The UAE Federal Tax Authority (FTA) released Corporate Tax Public Clarification CTP007 on Financial Statements and Related Audit Requirements for a Tax Group.

Tax Groups are required to prepare Aggregated Financial Statements under Article 3 of Ministerial Decision No. 114 of 2023. This requirement applies to all Tax Periods commencing on or after 1 June 2023.

Aggregated Financial Statements shall be prepared by aggregating the annual standalone Financial Statements of the members of the Tax Group.

While standalone Financial Statements of members of a Tax Group must be prepared in accordance with IFRS, not all the principles relating to consolidation under IFRS can apply to Aggregated Financial Statements of a Tax Group. As a result, there are certain deviations from IFRS that are necessary to prepare the Aggregated Financial Statements.

These Aggregated Financial Statements will be prepared in accordance with a special purpose framework, which will depart from certain IFRS accounting standards as issued by the International Accounting Standards Board (“IASB”). However, other than the deviations from IFRS mentioned below, the Aggregated Financial Statements should comply with IFRS and the standalone Financial Statements of the individual members of a Tax Group should still be prepared in accordance with IFRS.

The primary statements to be presented in a set of Aggregated Financial Statements are:

• Aggregated statement of financial position.
• Aggregated statement of profit or loss.
• Aggregated statement of other comprehensive income.
• Aggregated statement of changes in equity.

Article 54(2) of the Corporate Tax Law and Ministerial Decision No. 82 of 2023 and Ministerial Decision No. 84 of 2025 determine the categories of Taxable Persons required to prepare and maintain audited Financial Statements for Corporate Tax purposes.

Tax Groups are required to prepare and maintain audited Financial Statements in the circumstances described in the above provisions. Thus, the Aggregated Financial Statements of a Tax Group prepared based on this framework must undergo a special purpose audit in accordance with the relevant International Standards on Auditing (“ISA”).