Answer:
Yes. A Tax Group in the UAE is required to prepare consolidated financial statements to determine the Taxable Income of the group. These must consolidate the financial results, assets, and liabilities of the Parent Company and all Subsidiaries for the relevant Tax Period, eliminating intra-group transactions. (Article 42(1) of Federal Decree-Law No. 47 of 2022)
Key Points:
- The Parent Company must aggregate the standalone financial statements of all Subsidiaries using the same accounting standards (IFRS or IFRS for SMEs, depending on revenue). (Guide, Section 4.8)
- Same financial year and same accounting standards must apply to all members. (Article 40(1)(g)-(h))
- If consolidated revenue exceeds AED 50 million, the consolidated financial statements must be audited. (Guide, Section 4.8)
- Separate standalone financial statements of each member do not need to be audited, even if revenue exceeds AED 50 million.
- If a member joins or leaves a Tax Group, or the group ceases to exist, that member must prepare standalone financials based on the accounting basis used by the Tax Group. (Guide, Section 6...