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May 15, 2026

This decision clarifies the conditions for subsidiaries of a Government Entity to form a Tax Group for Corporate Tax purposes under Article 40 of the Corporate Tax Law. Subsidiaries where a government entity holds at least a 95% ownership interest may form a group if they meet standard conditions. However, the exempt Government Entity parent and any other exempt subsidiary are explicitly prohibited from being members of the Tax Group. The Government Entity is required to appoint one of the eligible subsidiaries to act as the representative of the Tax Group.

This is not an Official Translation:

Conditions for Forming the Tax Group by Subsidiaries of a Government Entity for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses

Federal Tax Authority Decision No. 12 of 2023

Issued 16 Aug 2023 – (Effective from the date of publishing in the Official Gazette)

[GTL Notes]

The Chairman of the Board of Directors of the Federal Tax Authority has decided:

Having reviewed the Constitution,
Federal Decree-Law No. 13 of 2016 on the Establishment of the Federal Tax Authority, and its amendments,
Federal Decree-Law No. 28 of 2022 on Tax Procedures,
Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses,
Cabinet Decision No. 74 of 2023 on the Executive Regulation of Federal Decree-Law No. 28 of 2022 on Tax Procedures,
Ministerial Decision No. 125 of 2023 on Tax Group for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses,
Decision of the Chairman of the Board of Directors No. 9 of 2021 on the Delegation of the Vice Chairman of the Board of Directors of the Federal Tax Authority, and
Pursuant to the approval of the Board of Directors on the policy for the Conditions for Forming Tax Groups by Subsidiaries of a Government Entity, at the twenty-seventh meeting held on 22 June 2023.

Article 1 - Definitions

The words and expressions contained in this Decision shall have the same meaning assigned against each in Federal Decree-Law No. 47 of 2022 referred to above, unless the context otherwise requires.

Article 2 - Conditions for Forming a Tax Group

For the purposes of Clause 2 of Article 40 of Federal Decree-Law No. 47 of 2022 referred to above, Subsidiaries in which a Government Entity directly or indirectly owns at least 95% (ninety-five percent) ownership interest as specified in paragraphs (b), (c) and (d) of Clause 1 of Article 40 of the Corporate Tax Law may form a Tax Group, subject to the following conditions: