FTA Decision 7 of 2025: Audited Accounts for UAE Tax Groups

If your group files a single UAE Corporate Tax return as a Tax Group, you now have a specific reporting duty that sits on top of your normal company accounts. You must prepare, audit, and file a special set of group-level financial statements. FTA Decision No. 7 of 2025 spells out exactly what that set must contain, how it must be prepared, and when it is due.

This guide explains what the Decision requires, how aggregated financial statements differ from ordinary company accounts and consolidated group accounts, and the practical steps your finance team, auditors, and tax function should take before the deadline. It also covers what happens when a company leaves the group, which is an area that quietly affects your future tax position.

Here are the headline points:

• The Decision was issued on 16 July 2025 and applies to tax periods beginning on or after 1 January 2025.
• Every UAE Tax Group must prepare Aggregated Financial Statements by combining the parent and each subsidiary.
• These statements must be audited under International Standards on Auditing and follow a special-purpose framework.
• They must reach the FTA within nine months of the end of the relevant tax period, unless the Authority sets another deadline.

The regime sits within Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, which is administered by the UAE Federal Tax Authority. You can read our summary of the change in the SBC insight on FTA Decision No. 7 of 2025.

What is FTA Decision No. 7 of 2025?

FTA Decision No. 7 of 2025 is a Federal Tax Authority decision that sets out how a UAE Tax Group must prepare, audit, and file special-purpose financial statements under the Corporate Tax regime. It was issued on 16 July 2025 and applies to tax periods commencing on or after 1 January 2025.

The Decision fills a practical gap. A Tax Group files one Corporate Tax return, yet each company inside the group still keeps its own books. The Decision tells the group exactly what document it must build at group level, so the FTA can see how the single taxable result was assembled. You can track this and later instruments on the FTA legislation page.

Why the timing matters

The nine-month window mirrors the deadline for the Corporate Tax return itself. Under the Ministry of Finance corporate tax guidance, a Taxable Person files the return within nine months of the end of the tax period. In practice, that means the audited aggregated statements and the return move on the same timeline. A group with a tax year ending 31 December 2025 is therefore working toward a filing point around the end of September 2026.

What is a UAE Tax Group under Articles 40 to 42?

To understand aggregated financial statements, you first need to understand what a Tax Group is. The concept comes from Articles 40 to 42 of the Corporate Tax Law.

Article 40: forming a Tax Group

Article 40 lets a Resident Person, called the Parent Company, apply to the FTA to form a Tax Group with one or more other Resident Persons, each called a Subsidiary. Key conditions include the following:

• The persons are juridical persons.
• The Parent Company owns at least 95% of the share capital of the Subsidiary, directly or indirectly.
• Neither the Parent Company nor the Subsidiary is a Qualifying Free Zone Person.
• The Parent Company and each Subsidiary share the same Financial Year.
• Both prepare their financial statements using the same accounting standards.

A Tax Group is treated as a single Taxable Person, represented by the Parent Company. The Parent Company and each Subsidiary are jointly and severally liable for the group's Corporate Tax.

Article 41: formation and cessation dates

Article 41 fixes when a Tax Group forms, when a Subsidiary joins or leaves, and when the group ceases. These dates matter because they define the exact period the aggregated statements must cover.

Article 42: taxable income of a Tax Group

Article 42 is the engine behind the numbers. The Parent Company consolidates the financial results, assets, and liabilities of each Subsidiary for the tax period and eliminates transactions between members. Article 42 also states that the Tax Group must prepare consolidated financial statements in accordance with accounting standards applied in the UAE. FTA Decision No. 7 gives that requirement its operational shape.

Why aggregated financial statements were introduced

The reason is straightforward. A group cannot simply hand the FTA the parent's own audited accounts or a bundle of separate subsidiary accounts and call it a group filing. Those documents do not present the group as one taxable person, and they do not show how intra-group transactions were removed.

Aggregated Financial Statements solve this by giving the Authority a single, group-level view built on a transparent method. Because the numbers are assembled rather than lifted from one ledger, the FTA wants to see the workings behind the aggregation. This supports accurate self-assessment and makes the group's taxable result reviewable on a consistent basis.

Three types of financial statements: know the difference

A common source of confusion is treating all group accounts as the same thing. They are not. The table below sets out the distinction.

The important message is that Aggregated Financial Statements are a distinct, special-purpose set. A group must build, audit, and file them separately, and it must stand behind the method used to assemble them.

What must a complete set contain?

A complete set under the Decision contains four audited statements:

• Statement of financial position
• Statement of profit or loss
• Statement of other comprehensive income
• Statement of changes in equity

Each statement plays a role. The statement of financial position shows what the group owns and owes at the period end. The statement of profit or loss shows performance over the year. The statement of other comprehensive income captures gains and losses that bypass profit or loss. The statement of changes in equity reconciles the movement in the group's net worth.

A set missing any one of these four is incomplete for the purposes of the Decision. A group cannot satisfy the requirement with a single summary schedule.

The special-purpose framework

The statements are prepared under a special-purpose framework rather than as ordinary general-purpose company accounts. That framework itself has to address several elements, including:

• The basis of aggregation
• The applicable accounting standards
• Any special adjustments and exceptions
• The treatment of investments
• The financial metrics used

The logic is simple. Two groups could combine the same underlying companies in different ways, so the Authority needs the methodology spelled out to confirm the taxable result rests on a consistent and defensible basis.

The audit requirement

The Aggregated Financial Statements must be audited in accordance with International Standards on Auditing, under a special-purpose framework. An unaudited set, or a general-purpose set, does not meet the requirement. This is where early coordination with your external auditor pays off, and where our audit and dispute resolution perspective can help align the tax and assurance workstreams.

The filing deadline

The Aggregated Financial Statements must be submitted to the FTA within nine months of the end of the relevant tax period, unless the Authority prescribes an alternative deadline. Returns are filed through the EmaraTax platform, and the same nine-month clock applies to the Corporate Tax return and payment, as confirmed on the UAE government corporate tax overview.

The table below shows how the timeline looks for two common year-ends.

Because an audit takes time, treat the nine-month deadline as an audit deadline, not just a filing deadline. Working back from the filing date is the only realistic way to plan.

What the statements must disclose

The Decision expects the statements to show the workings, not just the totals. Disclosure expectations include:

• The basis and framework used to prepare the statements
• The aggregation methodology
• The key accounting policies applied
• Significant estimates and judgments
• The treatment of investments
• Any special adjustments and exceptions
• Supporting notes and explanations

This level of disclosure lets the FTA follow how the group moved from separate company ledgers to one taxable result. Where related-party dealings sit inside the group, keeping the pricing story consistent also matters, and our transfer pricing team frequently works alongside the corporate tax function on this.

How Articles 53, 54, and 56 connect

FTA Decision No. 7 does not operate in isolation. Three articles of the Corporate Tax Law give it teeth.

Article 53: tax returns

Article 53 requires the Parent Company to file the Corporate Tax return on behalf of the Tax Group. The aggregated statements support the figures in that return, so the two must reconcile cleanly.

Article 54: financial statements

Article 54 allows the FTA to request the financial statements used to determine taxable income, and it lets the Minister require categories of Taxable Persons to prepare audited or certified financial statements. This is the legal hook that connects the audited aggregated statements to the group's filing.

Article 56: record keeping

Article 56 requires records that enable the FTA to ascertain taxable income, generally kept for seven years. For a Tax Group, that means retaining the standalone accounts, the aggregation workings, the elimination entries, and the audited group set.

Interaction with Ministerial Decision No. 84 of 2025

FTA Decision No. 7 works together with the rules on who must hold audited financial statements. Ministerial Decision No. 84 of 2025 sets out which Taxable Persons must prepare and maintain audited financial statements, and it brings Tax Groups within scope. In other words, one instrument confirms that a Tax Group needs audited accounts, and FTA Decision No. 7 defines the special-purpose, group-level form those audited accounts must take. Read together, they leave little doubt that a Tax Group must produce an audited, aggregated set for its filing. For a closer look at the audit thresholds, see our explainer on who needs audited accounts under Ministerial Decision No. 84 of 2025.

What happens when a member leaves the group?

The Decision also addresses the moment a Subsidiary exits a Tax Group. The departing entity must adopt the Tax Group's carrying values of its assets and liabilities as its opening balances going forward. If the applicable accounting standards do not allow the entity to record those exact values, its taxable income must still be computed as if those carrying values had been used.

The effect is continuity of the tax base. Without this rule, an exiting company could reset the value of its assets on the way out and distort the depreciation or gains it reports afterwards. By forcing the group's carrying values to carry over, the Decision keeps the tax cost of assets consistent across the transition and closes a potential planning gap. This aligns with the broader Article 42 approach to transfers within a group, where a two-year rule can pull previously untaxed income back into charge if a transferor or transferee leaves the group.

If your group is contemplating adding or removing members, plan the accounting and tax base treatment before the change, ideally with support from our corporate tax team. Groups still shaping their structure may also find our note on UAE tax group registration useful for the formation mechanics.

A simple worked timeline

Consider a Parent Company with two wholly owned subsidiaries and a 31 December 2025 tax year. A practical path looks like this:

• Q1 2026: finalise each entity's standalone accounts and confirm consistent accounting standards across the group.
• Q2 2026: build the aggregation, eliminate intra-group transactions under Article 42, and document the methodology.
• Q2 to Q3 2026: complete the ISA audit of the aggregated set under the special-purpose framework.
• By end of September 2026: file the Corporate Tax return and submit the audited Aggregated Financial Statements through EmaraTax.

The sequence matters. The audit cannot start until the aggregation is stable, and the aggregation cannot be stable until each entity's accounts are closed on the same basis.

Practical implications across the business

FTA Decision No. 7 is as much an accounting and process exercise as a tax one. Here is how it touches each function.

Parent companies

The Parent Company owns the obligation. It represents the Tax Group, files the return, and stands behind the aggregation methodology. Accountability sits at the top, so the parent's finance leadership should own the timetable.

Finance teams

Finance teams need every entity to close on the same accounting standards and the same year-end. They must produce clean elimination entries for intra-group transactions and a documented aggregation method that an auditor can follow.

Auditors

External auditors need the special-purpose framework defined early, along with complete supporting notes. Because this is a special-purpose ISA audit rather than a standard statutory audit, scoping conversations should happen well before year-end close.

Tax managers

Tax managers must reconcile the aggregated statements to the Corporate Tax return, monitor the nine-month deadline, and keep records that satisfy Article 56. They also track group membership changes and the carrying-value continuity rule.

ERP and reporting processes

Systems should be able to tag intra-group transactions for elimination, apply consistent accounting policies across entities, and produce the four required statements at group level. Manual spreadsheets can work for small groups, but larger groups benefit from automating the aggregation and elimination steps to reduce error and rework.

Common mistakes and how to avoid them

• Treating the parent's own audited accounts as the group filing. The group needs a distinct, special-purpose aggregated set.
• Filing only three statements. A complete set has four, including other comprehensive income and changes in equity.
• Skipping the methodology disclosure. The FTA expects the aggregation basis, policies, estimates, judgments, and investment treatment to be explained.
• Leaving the audit too late. The audited set must be ready within the nine-month window, so plan back from that date.
• Inconsistent accounting standards or year-ends across members, which can undermine both group eligibility and the aggregation.
• Ignoring the carrying-value rule when a member leaves, which can distort the exiting entity's future depreciation and gains.
• Failing to reconcile the aggregated statements to the Corporate Tax return before filing.

Frequently asked questions

What is FTA Decision No. 7 of 2025?

It is a Federal Tax Authority decision, issued on 16 July 2025, that requires UAE Tax Groups to prepare, audit, and submit Aggregated Financial Statements under the Corporate Tax regime. It applies to tax periods commencing on or after 1 January 2025 and specifies the framework, disclosures, required statements, and filing deadline.

Which businesses must prepare Aggregated Financial Statements?

Any Tax Group under UAE Corporate Tax. The group combines the standalone financial statements of the parent and each subsidiary into a single special-purpose set. Companies that are not part of a Tax Group follow their own reporting obligations rather than this aggregation requirement.

When are the aggregated financial statements due?

Within nine months of the end of the relevant tax period, unless the FTA prescribes an alternative deadline. For a group with a 31 December year-end, that points to the end of September the following year.

Do the statements need to be audited?

Yes. The Decision requires them to be audited in accordance with International Standards on Auditing and prepared under a special-purpose framework. An unaudited or general-purpose set does not meet the requirement.

How is this different from consolidated financial statements?

Consolidated financial statements are general-purpose group accounts prepared under the applicable accounting framework. Aggregated Financial Statements are a special-purpose set built specifically to support the Tax Group's single Corporate Tax return, combining the parent and each subsidiary and disclosing the aggregation methodology.

What happens to a subsidiary that leaves a UAE Tax Group?

A departing subsidiary must adopt the Tax Group's carrying values of assets and liabilities as its opening balances. If accounting standards do not allow those values to be recorded, taxable income is still calculated as though they had been, preserving continuity of the tax base.

What are the four required statements?

Statement of financial position, statement of profit or loss, statement of other comprehensive income, and statement of changes in equity. All four are needed for a complete set.

Conclusion

FTA Decision No. 7 of 2025 turns a simple idea, one return for the group, into a concrete reporting obligation. A UAE Tax Group must produce a distinct, special-purpose set of Aggregated Financial Statements, audit it under International Standards on Auditing, disclose the aggregation methodology, and file it within nine months of the tax period end. The rules on carrying values when a member leaves protect the continuity of the tax base and remove a potential planning gap.

The practical takeaway is to treat this as a coordinated accounting, audit, and tax project. Confirm consistent standards and year-ends across every member, build and document a defensible aggregation method, schedule the ISA audit early, and reconcile the group set to your Corporate Tax return before filing.

If you want help designing a defensible aggregation methodology or aligning your group filing with the deadline, explore our corporate tax and audit and dispute resolution services, browse more analysis across our insights and full service range, or start a conversation through the SBC homepage.

This publication is for general information only and does not constitute professional advice. Please consult a qualified advisor before acting on any matter covered here.

15/8/25 Royalty Payments in Transfer Pricing

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