Introduction

In July 2025, the Federal Tax Authority (FTA) issued Decision No. 7 of 2025. This decision sets out how audited special purpose aggregated financial statements should be prepared for tax groups in the UAE.

The new rules apply to tax periods starting on or after 1 January 2025. This is an important update for businesses that are part of a tax group under the UAE Corporate Tax Law.

Who is this applicable for?

These requirements apply to all tax groups formed under the UAE Corporate Tax Law.

So, if your company is registered as part of a tax group, you will need to prepare and submit audited aggregated financial statements from the first tax period starting in 2025.

Objective of the ruling

The main goal of this decision is to bring consistency and transparency in how tax groups report their financials.

• It ensures that all tax groups follow the same standards
• Reports are clear and align with international accounting and auditing practices

What are Aggregated Financial Statements?

As per the FTA, aggregated financial statements mean:

• Financial Statements prepared by adding together the standalone financial statements of the parent company and each subsidiary in the tax group.
• In simple words, instead of preparing one consolidated report, each company’s financials are combined line by line, while removing transactions between the group members.

Requirements as per the ruling

• Each tax group must finalize their standalone financial statements using consistent accounting policies.
• The aggregated financial statements must be prepared in AED (UAE Dirhams).
• They must be audited under International Standards on Auditing (ISA).
• The audited reports must be submitted to the FTA within nine months of the end of each tax period.

Framework for Statement Preparation

• Start with each member’s standalone financial statements.
• Aggregate them together on a line-by-line basis.
• Remove intra-group transactions like income, expenses, or transfers within the group.
• Follow IFRS or IFRS for SMEs as accounting standards.
• Present everything in AED.

Principles to be applied

• Intra-group transactions are eliminated, but investments and equity balances between members are kept.
• Impairments on investments within the group are not eliminated and must remain.
• Non-group investments (subsidiaries, associates, or joint ventures outside the tax group) should be carried at cost less impairment.
• Use uniform accounting policies across all members.
• Always use pre-tax profit or loss for aggregation.

Statements & Disclosures

The set of aggregated financial statements must include:

• Statement of Financial Position
• Statement of Profit or Loss
• Statement of Other Comprehensive Income
• Statement of Changes in Equity

Disclosures must explain:

• The framework and method of aggregation.
• Accounting policies, estimates, and judgments used.
• Notes that support the figures reported.

Special provisions for members leaving the tax group

• It must take the asset and liability values recorded in the group’s aggregated financial statements as its opening balances.
• If accounting standards don’t allow this, taxable income should still be calculated as if those values were applied.
• This ensures smooth continuity and avoids any tax reporting gaps when members exit.

Conclusion

The FTA’s Decision No. 7 of 2025 is a major step toward stronger compliance and transparency for tax groups in the UAE.

Tax groups should act early, align accounting policies, and prepare their systems in advance to avoid last-minute compliance issues.

Quick Checklist

• ✔ Finalize standalone financials with uniform accounting policies
• ✔ Build aggregated statements in AED
• ✔ Conduct audit under International Standards on Auditing (ISA)
• ✔ Submit audited reports within 9 months of period end
• ✔ Applies only for tax periods starting on/after 1 Jan 2025

👉 Need help preparing for the new rules? Miqat Chartered Accountants can guide your business in aligning with the FTA’s requirements. Contact us today at www.miqatca.com or call +971 54 583 0947 for expert support.