| Ministerial Decision No. 125 of 2023 (Old) |
Ministerial Decision No. 301 of 2024 (New) |
Remarks |
| Article 3 - Resident person |
| 1. The old decision required a foreign juridical person, considered a resident in the UAE by virtue of having its Place of Effective Management (POEM) in the UAE or a juridical person incorporated or otherwise established in the UAE but with its POEM in another country, to maintain documentation (TRC or confirmation from competent authority) supporting its non-residency in that other country or foreign territory |
Deleted |
The authorities have eliminated the requirement of maintaining documentation, which would ease the taxpayer's compliance burden. This would imply that a foreign company having a POEM in UAE can be included in a tax group, or a UAE company having a POEM outside UAE but considered a resident of UAE can be included in the tax group without additional compliance.
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| Article 8 - Arm's Length Principle, Transfer Pricing Documentation Requirements, and the Calculation of the Taxable Income of a Tax Group |
| 2. The old decision required the calculation of income attributable to each member when the Tax Group was claiming a foreign tax credit. |
This situation is deleted. |
Thus, a tax group whose members earn foreign income on which the tax group can claim foreign tax credit is no longer required to compute taxable income attributable to the constituent members separately. |
| 3. NA |
The new decision provides for the computation of income attributable to a new member entering a tax group in cases where a new member joins the Tax group that has unutilized tax losses. |
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| 4. The old decision required disclosure of relevant information as per a "notice or a decision issued by the Authority." |
The phrase "notice or through a decision issued by the authority" has been replaced with "in accordance with Clause (1) of Article (55) of the Corporate Tax Law." |
This change provides specific reference to the transfer pricing provisions in the law. Disclosure will now align with the relevant provisions and decisions issued under transfer pricing regulations. |
| 5. NA |
New Clauses 3 & 5 inserted to specify that pre-grouping tax losses and pre-grouping carried forward net interest expenditure of a member of the tax group must be offset / fully utilized against the taxable income of the tax group e before any remainder can be carried forward to subsequent Tax Period. |
These clauses provide clarity on the carry--forward and utilization of pre-grouping tax losses and net interest expenditure of a new member in a tax group. |
| 6. NA |
New Clause 4 & 6 inserted to state that pre-grouping tax losses or pre-grouping carried-forward net interest expenditure of a member of the tax group shall be forfeited if any of the criteria below are not fulfilled:
- The tax group does not calculate income attributable to the relevant member, and
- The pre-grouping tax losses and pre-grouping carried-forward net interest expenditure are not fully offset or utilized by the tax group. |
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