UAE Corporate Tax​: Public clarification CTP007​

Key highlights​

The following important considerations are covered in the public clarification:​

• Required Primary Statements - The primary statements to be presented in a set ofAggregated Financial Statements (“AFS”) are:​

1. Aggregated statement of financial position.​

2. Aggregated statement of profit or loss.​

3. Aggregated statement of other comprehensive income.​

4. Aggregated statement of changes in equity.​

• Comparative Information - Comparative figures for the preceding tax period must bepresented in the AFS, except for the first tax period in which the Tax Group is formed.​

• Explanatory Notes and Disclosures - Explanatory notes must sufficiently support thenumbers in the AFS and should align with IAS 1 (Presentation of Financial Statements). ​

• Treatment of Income Tax Balances - The AFS serves to determine the aggregated accountingnet profit for the Tax Return. UAE Corporate Tax balances (current or deferred) recognized instandalone financial statements are excluded from aggregation. Conversely, the effects of incometaxes under other legislations, including foreign taxes and other taxes levied in the UAE, shallremain aggregated.​

• Uniform Accounting Policies - All Tax Group members must apply uniform accountingpolicies. If differences exist, the financial statements of the Subsidiaries must be adjusted to alignwith the Parent Company’s accounting policy for the purposes of preparing the AFS.​

• Investments and Equity Grossing Up - Investments recorded by the Parent and equityrecorded by Subsidiaries within the Tax Group are aggregated without elimination, resulting in agrossing up of the balance sheet. This is necessary to exclude the impact of IFRS 3 and IFRS 10adjustments (e.g., goodwill, bargain purchase gains, fair value adjustments).​

• Audit Requirements - For tax periods commencing on or after 1 January 2025, all Tax Groupsare required to prepare and maintain audited special purpose AFS, regardless of revenuethresholds. The audit must be conducted in accordance with International Standards on Auditing(ISA) for special purpose frameworks. The audited AFS must be submitted to the FTA at the timeof filing the tax return.​

Next steps​

The public clarification provides further clarity on the framework and presentation requirementsof the AFS. It is essential for tax groups to carefully evaluate and incorporate these requirementsto ensure complete compliance with the FTA’s guidelines.​

It is essential to stay alert and adapt to evolving UAE CT legislation for tax efficiency and taxcompliance.​

For further assistance, you can reach us at CT.UAE@pwc.com or your dedicated PwC tax contact.​