Federal Tax Authority Decision No. 7 of 2025 – What Tax Groups Need to Know

The UAE’s corporate tax law has been bringing many new changes, and one of the most important ones for companies working together as a Tax Group is the new Federal Tax Authority (FTA) Decision No. 7 of 2025.

This decision was issued on 16 July 2025 and it sets clear rules for how Tax Groups must prepare, audit, and submit their financial statements. The rules apply to tax periods starting on or after 1 January 2025.

What is a Tax Group and Why This Matters?

A Tax Group means when a parent company and its subsidiaries are treated as one single taxable unit for corporate tax purposes under Federal Decree-Law No. 47 of 2022 on Corporate Tax.

Until now, each company in the group would maintain its own financial statements, and there wasn’t much clarity on how to combine them when filing for corporate tax. Decision No. 7 of 2025 changes that by creating a proper framework that Tax Groups must follow.

"Key Requirements Under Decision No. 7 of 2025"

Special Purpose Financial Statements:

From now on, Tax Groups must prepare Aggregated Financial Statements.
This means:

• The parent and all subsidiaries’ accounts must be combined.

• Intercompany transactions (like sales or loans between group members) must be eliminated.

• Everything must be shown line by line in one financial report.

• The format has to follow IFRS or IFRS for SMEs, but with some specific adjustments (for example, business combination accounting under IFRS 3 does not apply).

These statements must also be audited according to International Standards on Auditing (ISA).

Deadlines and Submissions:

The audited Aggregated Financial Statements must be submitted to the FTA within 9 months after the end of the tax period.
Before this decision, there was no fixed deadline for Tax Groups.

What Needs to Be Disclosed?

The financial statements now need to include more details than before. For example:

• Statement of financial position, profit or loss, and changes in equity.

• Notes explaining accounting policies, estimates, and judgments.

• How exactly the aggregation was done.

This ensures more transparency and consistency in how Tax Groups report their taxable income.

Members Leaving the Group?

Decision No. 7 also explains what happens if a company leaves a Tax Group or if the group is dissolved.

The member must adopt the values of assets and liabilities recorded by the Tax Group as opening balances in its standalone accounts. If accounting standards don’t allow it, taxable income must still be calculated as if they did. This removes confusion that previously existed.

Legal Backing:

• Federal Decree-Law No. 47 of 2022 on Corporate Tax is the main law.

• Article 54 of the Corporate Tax Law gave the Minister authority to require audited financial statements.

• FTA Decision No. 7 of 2025 implements this specifically for Tax Groups.

• The decision was published in the Official Gazette and is enforceable from 1 January 2025.

Why This Decision is Important?

This decision is not just another formality. It means that Tax Groups now have a uniform standard for reporting, with audited statements and strict deadlines. This reduces manipulation, ensures tax compliance, and aligns UAE corporate tax reporting with international best practices.

For businesses, this also means more work — but at the same time, more clarity. Instead of guessing how to prepare combined statements, the rules are now written down and binding.

In simple words: If you are part of a Tax Group in the UAE, you can no longer just keep separate accounts and combine them informally. From 2025 onwards, you must prepare audited aggregated accounts, submit them on time, and follow IFRS rules as per FTA Decision No. 7 of 2025.