Mandatory Audited Special Purpose Financial Statements for Tax Groups: 2026 UAE Rule Explained

UAE businesses operating through Corporate Tax Groups face an important financial reporting requirement in 2026. Under Ministerial Decision No. 84 of 2025 and Federal Tax Authority Decision No. 7 of 2025, Tax Groups are required to prepare and maintain audited special purpose financial statements for Corporate Tax purposes.

The requirement applies to Tax Periods commencing on or after 1 January 2025 and represents a significant change from the earlier threshold-based approach. The previous AED 50 million consolidated revenue threshold no longer determines whether a Tax Group must prepare audited financial statements for Corporate Tax purposes.

Instead, all Tax Groups must prepare audited special purpose Aggregated Financial Statements, regardless of the group’s revenue.

This means that companies preparing their first Corporate Tax filings under the new framework need to consider the audit requirement as part of their year-end process rather than treating it as a separate exercise immediately before the tax filing deadline.

What Are Audited Special Purpose Financial Statements in the UAE?

Audited special purpose financial statements are financial statements prepared specifically to meet a particular reporting requirement. In the case of a UAE Corporate Tax Group, these statements are prepared for Corporate Tax purposes under the framework prescribed by the Federal Tax Authority.

For Tax Groups, the relevant statements are generally referred to as Aggregated Financial Statements.

They are prepared by aggregating the standalone financial statements of the parent company and each subsidiary that is a member of the Tax Group, with the required treatment of transactions between group members.

These statements should not simply be treated as a copy of the group’s ordinary IFRS consolidated financial statements. The UAE Corporate Tax framework establishes specific rules for preparing the Aggregated Financial Statements, including requirements concerning intra-group transactions, accounting policies, presentation, and disclosures.

Also Read: Liquidation Audit Process in Dubai: A Step-by-Step Guide

What Changed for Tax Groups in 2026?

The key change is the removal of the previous AED 50 million consolidated revenue threshold for Tax Groups.

Under the earlier rules, a Tax Group’s consolidated revenue was relevant when determining whether audited financial statements were required for Corporate Tax purposes. The threshold was AED 50 million.

Ministerial Decision No. 84 of 2025 changed this approach for Tax Periods commencing on or after 1 January 2025.

The current framework provides that:

• Taxable Persons that are not Tax Groups generally fall within the AED 50 million revenue threshold for audited financial statements.
• Qualifying Free Zone Persons are required to prepare and maintain audited financial statements regardless of revenue.
• Tax Groups must prepare and maintain audited special purpose financial statements in accordance with the requirements specified by the FTA.

Therefore, the AED 50 million audit threshold does not exempt a Tax Group from the special purpose audit requirement.

Does the New Requirement Apply to Every UAE Tax Group?

Yes, for Tax Periods commencing on or after 1 January 2025, the requirement applies to Tax Groups regardless of their revenue.

This means a Tax Group with consolidated revenue below AED 50 million cannot rely on the former threshold to avoid the special purpose audit requirement.

The Federal Tax Authority’s Public Clarification CTP007 confirms that all Tax Groups are required to prepare and maintain audited special purpose financial statements for Tax Periods commencing on or after 1 January 2025.

This is particularly important for smaller groups that may have previously assumed that their revenue level placed them outside the audited financial statement requirements.

What Is a Tax Group Under UAE Corporate Tax Law?

A Tax Group is a group of companies that has been approved by the Federal Tax Authority to be treated as a single taxable person for UAE Corporate Tax purposes.

The group generally consists of a UAE-resident parent company and one or more UAE-resident juridical persons that meet the conditions for joining a Tax Group.

Among other requirements, the Corporate Tax framework includes conditions relating to ownership, control, residence, legal status, and the tax status of the entities involved.

The parent company applies to form the Tax Group, and once the FTA approves the application, the Tax Group is generally treated as a single taxable person for Corporate Tax purposes.

This treatment has important consequences for Corporate Tax reporting, including the preparation of financial information for the group as a whole.

Also Read: FTA’s Extended 15-Year Audit Window: How UAE Businesses Should Prepare

What Is the Difference Between a Tax Group and an Ordinary Corporate Group?

Not every group of companies is automatically a UAE Corporate Tax Group.

A corporate group may have a parent company and several subsidiaries under common ownership, but unless the relevant entities have formed an approved Tax Group under the UAE Corporate Tax Law, they are generally treated as separate taxable persons for Corporate Tax purposes.

A Tax Group therefore has a specific legal and tax meaning. Companies should not assume that ordinary financial consolidation automatically creates a Tax Group.

How Are Special Purpose Aggregated Financial Statements Prepared?

The Aggregated Financial Statements are prepared using the standalone financial statements of the parent company and each subsidiary that is a member of the Tax Group.

The financial information is aggregated line by line in accordance with the framework established by the FTA.

Intra-Tax Group transactions generally need to be eliminated, including relevant income, expenses, unrealised gains and losses, and other transactions between members, subject to the specific rules and exceptions in the FTA framework.

Transactions involving entities outside the Tax Group are not treated as intra-group transactions and therefore are not eliminated merely because the entities are part of a wider corporate group.

Why Aggregated Financial Statements Are Not the Same as Normal Consolidated Accounts

This distinction is particularly important for finance teams.

A company may already prepare consolidated financial statements under IFRS for shareholders, lenders, management, or other stakeholders. However, the special purpose Aggregated Financial Statements required for UAE Corporate Tax purposes follow a specific framework.

The FTA framework requires the standalone financial statements of Tax Group members to be aggregated and applies specific rules that can differ from ordinary IFRS consolidation.

For example, certain accounting effects arising from IFRS 3 and IFRS 10 business combination accounting are not reflected in the same way in the Tax Group’s Aggregated Financial Statements.

Similarly, investments in Tax Group members and corresponding equity balances are treated according to the specific aggregation framework rather than simply following every adjustment that would appear in conventional consolidated accounts.

Finance teams should therefore avoid assuming that their existing consolidated accounts can simply be submitted as the Tax Group’s special purpose financial statements.

What Financial Statements Must Be Included?

The required Aggregated Financial Statements include the following primary statements:

• Aggregated statement of financial position.
• Aggregated statement of profit or loss.
• Aggregated statement of other comprehensive income.
• Aggregated statement of changes in equity.

The financial statements must also include the relevant explanatory notes and disclosures required under the FTA framework.

The disclosures should explain matters such as the special purpose framework applied, the basis of aggregation, accounting policies, significant estimates and judgements, and other information necessary to understand the financial statements.

Are Cash Flow Statements Required?

The FTA’s specified set of primary Aggregated Financial Statements does not list a statement of cash flows among the required primary statements.

Finance teams should nevertheless follow the latest FTA requirements and any applicable clarification when preparing the financial statements, particularly where the group’s existing reporting package contains additional statements.

What Accounting Standards Apply?

The Aggregated Financial Statements must generally comply with IFRS or IFRS for SMEs, as applicable, while also following the special purpose requirements established by the FTA.

One important practical requirement is consistency in accounting policies across Tax Group members.

Where different group members use accounting policies that are not aligned, adjustments may be necessary when preparing the Aggregated Financial Statements.

This means that finance teams should review accounting policies across all Tax Group members before year-end rather than discovering significant differences during the audit.

Also Read: Federal Decree-Law No. 17 of 2025: What the New Tax Procedures Law Means for UAE Audits

What Happens to Intra-Group Transactions?

Intra-Tax Group transactions are an important part of the preparation process.

Transactions between Tax Group members generally need to be eliminated when preparing the Aggregated Financial Statements, subject to the specific exceptions provided under the FTA framework.

Examples can include:

• Intercompany sales.
• Intercompany purchases.
• Management fees.
• Intercompany interest.
• Intercompany loans.
• Dividends between group members.
• Unrealised gains or losses arising from intra-group transactions.
• Other balances and transactions between Tax Group members.

This makes accurate intercompany reconciliation particularly important.

If one group company records a receivable while another records a corresponding payable, those balances should be reconciled before the Aggregated Financial Statements are prepared.

Do Individual Tax Group Members Need Separate Audited Financial Statements?

One important benefit of the Tax Group framework is that members are not required to maintain separate audited standalone financial statements solely for UAE Corporate Tax purposes simply because they are members of a Tax Group.

For example, a Tax Group member with revenue exceeding AED 50 million does not automatically become subject to the standalone Corporate Tax audit requirement merely because its own revenue exceeds that amount.

The relevant audit requirement applies to the Tax Group’s special purpose Aggregated Financial Statements.

However, this does not mean that group members can stop maintaining their own accounting records or financial statements. Each entity still needs reliable standalone financial information because those records form the basis for preparing the Tax Group’s Aggregated Financial Statements.

What Is the Deadline for Submitting the Audited Financial Statements?

The audited Aggregated Financial Statements must be submitted to the FTA within nine months after the end of the relevant Tax Period, subject to the applicable FTA requirements.

This aligns with the general Corporate Tax filing deadline applicable to Tax Groups.

For a Tax Group whose Tax Period ends on 31 December, the nine-month deadline generally falls on 30 September of the following year.

For example, a Tax Group with a Tax Period ending on 31 December 2025 would generally need to complete its Corporate Tax compliance and submit the relevant audited Aggregated Financial Statements by 30 September 2026.

This makes the 2026 compliance cycle particularly important for Tax Groups with a calendar-year financial period.

What If a Tax Group Already Has Consolidated Financial Statements?

Having audited consolidated financial statements can be extremely useful, but it does not automatically remove the requirement to prepare the special purpose Aggregated Financial Statements.

The Tax Group’s Aggregated Financial Statements are prepared under the specific framework established for UAE Corporate Tax purposes and may require adjustments to the group’s existing consolidated accounts.

For example, the treatment of business combination accounting, investments in Tax Group members, intra-group transactions, and other balances may need to be reviewed against the FTA’s requirements.

Therefore, companies that already prepare audited consolidated financial statements should use those accounts as a starting point where appropriate, but should still perform a separate assessment against the UAE Tax Group reporting framework.

Also Read: ADGM Audit and Financial Reporting Requirements Explained

What Is the 2026 Impact on UAE Finance Teams?

The change effectively moves the Tax Group audit requirement from a threshold-based exercise to a universal requirement for qualifying Tax Groups.

This creates several practical implications for finance departments.

More Groups Need Audit Coordination

Smaller Tax Groups that previously fell below the AED 50 million threshold must now plan for an audit of their special purpose Aggregated Financial Statements.

Intercompany Reconciliations Become More Important

The aggregation process requires careful treatment of transactions between Tax Group members. Differences between intercompany ledgers can delay the preparation of the final statements.

Accounting Policies Need to Be Aligned

Different accounting practices across group members can create additional work during aggregation. Finance teams should identify and resolve material differences before the audit begins.

Year-End Planning Needs to Start Earlier

The nine-month filing deadline may appear generous, but groups with multiple subsidiaries can require substantial time to close their individual accounts, reconcile intercompany balances, prepare the Aggregated Financial Statements, complete the audit, and resolve audit queries.

Practical Readiness Checklist for UAE Tax Groups

Finance teams can use the following checklist to prepare for the audited special purpose financial statement requirement.

1. Confirm Tax Group Status

• Confirm which entities are included in the Tax Group.
• Verify the parent company and subsidiary details.
• Review any entities that joined or left the Tax Group during the year.
• Confirm the Tax Period for each member.

2. Finalise Standalone Financial Records

• Complete bookkeeping for every Tax Group member.
• Close the relevant accounting period.
• Reconcile bank accounts.
• Review receivables and payables.
• Complete fixed asset reconciliations.
• Review provisions and accruals.
• Confirm shareholder and intercompany balances.

3. Reconcile Intercompany Transactions

• Match intercompany receivables and payables.
• Reconcile intercompany sales and purchases.
• Review intercompany loans.
• Review management charges and other intercompany fees.
• Identify unrealised gains and losses.
• Document significant differences and their resolution.

4. Review Accounting Policies

• Compare accounting policies across Tax Group members.
• Identify material differences.
• Determine whether adjustments are required for aggregation.
• Ensure the reporting framework is applied consistently.

5. Prepare the Aggregated Financial Statements

• Aggregate the standalone financial statements line by line.
• Apply the required intra-group eliminations.
• Review investment and equity balances.
• Apply the specific FTA requirements for business combinations and other relevant adjustments.
• Prepare the required primary statements.
• Prepare the required notes and disclosures.
• Present the financial statements in AED.

6. Engage the Auditor Early

• Select an auditor familiar with UAE Corporate Tax Tax Group requirements.
• Share the reporting timetable with the auditor.
• Provide the standalone financial statements of all group members.
• Provide the intercompany reconciliation schedules.
• Prepare supporting documentation for significant balances.
• Resolve preliminary audit questions before the final reporting stage.

7. Plan for the FTA Filing Deadline

• Calculate the nine-month deadline from the end of the Tax Period.
• Allow sufficient time for audit completion.
• Allow time to resolve audit adjustments and queries.
• Coordinate the audited financial statements with the Corporate Tax return.
• Submit the required documents to the FTA within the applicable deadline.

Common Problems That Can Delay a Tax Group Audit

Tax Group audits can become complicated when finance teams begin preparation too close to the filing deadline.

Common issues include:

• Unreconciled intercompany balances.
• Different accounting policies between group companies.
• Incomplete standalone financial statements.
• Late year-end adjustments.
• Missing supporting documents.
• Incorrect elimination entries.
• Unclear treatment of entities that joined or left the Tax Group.
• Differences between management accounts and final financial statements.
• Insufficient documentation for significant transactions.
• Late appointment of an auditor.

These issues can create multiple rounds of questions between the finance team and auditor, reducing the time available before the FTA filing deadline.

Why Early Preparation Matters in 2026

The 2026 compliance cycle is the first major reporting period in which many UAE Tax Groups will need to manage the new universal audit requirement regardless of revenue.

This creates additional demand for auditors with experience in Tax Group financial reporting, particularly as multiple groups approach the same Corporate Tax filing deadlines.

Waiting until the final weeks before the nine-month deadline can create avoidable pressure. Finance teams may need to complete several tasks at the same time, including finalising accounts, reconciling group balances, preparing the Aggregated Financial Statements, responding to audit queries, and completing the Corporate Tax return.

Starting the process early allows the group to identify accounting and documentation issues while there is still sufficient time to correct them.

What Should a Tax Group Do Now?

Tax Groups should treat the audited special purpose financial statement requirement as part of their annual financial close process.

A practical approach is to begin by confirming the Tax Group’s current membership and Tax Period, then ensure that all members have completed their standalone accounting records.

The group should then focus on intercompany reconciliations, accounting policy consistency, aggregation adjustments, and supporting documentation.

Once the underlying information is ready, the auditor can begin the special purpose audit without waiting for the final Corporate Tax filing deadline to approach.

How AFD Auditors Can Help With UAE Tax Group Audits

The new requirement makes specialised audit planning increasingly important for UAE Tax Groups.

AFD Auditors can assist Tax Groups with the preparation and audit of special purpose Aggregated Financial Statements for UAE Corporate Tax purposes.

Our work can include reviewing the financial information of Tax Group members, assessing intercompany balances, reviewing aggregation adjustments, examining supporting documentation, and performing the audit procedures required for the special purpose financial statements.

Early involvement also allows potential accounting and documentation issues to be identified before the final reporting period, helping finance teams work towards the applicable FTA deadline with greater certainty.

For groups that already have statutory or consolidated financial statements, we can also help assess the additional requirements applicable to the UAE Corporate Tax Aggregated Financial Statements.

Frequently Asked Questions

Are all UAE Tax Groups required to prepare audited financial statements?

For Tax Periods commencing on or after 1 January 2025, all UAE Tax Groups are required to prepare and maintain audited special purpose financial statements in accordance with the FTA framework, regardless of their consolidated revenue.

Has the AED 50 million audit threshold been removed?

The AED 50 million threshold continues to apply to certain Taxable Persons that are not Tax Groups. However, it no longer determines whether a Tax Group must prepare audited special purpose financial statements. All Tax Groups are subject to the specific Tax Group audit requirement for relevant Tax Periods.

What are the special purpose financial statements called for UAE Tax Groups?

They are generally referred to as Aggregated Financial Statements. They are prepared by aggregating the standalone financial statements of the parent company and Tax Group members under the special purpose framework established by the FTA.

Do Tax Group members need separate audited financial statements?

Tax Group members do not generally need separate audited standalone financial statements solely for UAE Corporate Tax purposes because they are members of a Tax Group. However, each member must maintain reliable standalone accounting records and financial information because those records form the basis for preparing the Tax Group’s Aggregated Financial Statements.

Can existing IFRS consolidated financial statements be used?

Existing consolidated financial statements can provide useful information, but they should not automatically be treated as the Tax Group’s special purpose Aggregated Financial Statements. The FTA framework contains specific aggregation and elimination requirements that may require adjustments to the group’s ordinary consolidated accounts.

When must the audited Aggregated Financial Statements be submitted?

The audited Aggregated Financial Statements must generally be submitted to the FTA within nine months after the end of the relevant Tax Period, subject to the applicable FTA requirements.

What happens if a Tax Group has revenue below AED 50 million?

The group is still subject to the audited special purpose financial statement requirement for Tax Periods commencing on or after 1 January 2025. The group’s revenue does not exempt it from the Tax Group requirement.

Why should Tax Groups appoint an auditor early?

Preparing Aggregated Financial Statements can involve multiple entities, intercompany reconciliations, accounting policy alignment, elimination entries, and supporting documentation. Starting early gives the finance team and auditor time to resolve these matters before the Corporate Tax filing deadline.

Conclusion

The introduction of mandatory audited special purpose financial statements represents an important change for UAE Tax Groups.

For Tax Periods commencing on or after 1 January 2025, Tax Groups must prepare and maintain audited special purpose Aggregated Financial Statements regardless of their revenue. The previous AED 50 million threshold no longer provides an exemption for Tax Groups.

The new requirement also means that ordinary consolidated financial statements may not be sufficient on their own. Tax Groups need to apply the specific FTA framework, including the required aggregation of member financial statements, treatment of intra-group transactions, consistent accounting policies, presentation requirements, and disclosures.

With the audited statements generally due within nine months after the end of the Tax Period, early preparation is essential. Finance teams should complete their standalone accounts, reconcile intercompany balances, review accounting policies, prepare the Aggregated Financial Statements, and coordinate with their auditor well before the filing deadline.

For Tax Groups preparing their 2026 Corporate Tax compliance, starting the audit process early can help avoid last-minute reporting issues and the capacity pressures that may arise when many groups seek audit support at the same time.

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