UAE CT: Income Attribution to Tax Group Member | Fair Tax Assessment for Group Members |Kress Cooper

In this video, we explore the process of attributing income to members of a tax group within the UAE Corporate Tax (CT) framework. Understanding how to fairly assess the taxable income of each group member is crucial for tax compliance and effective tax planning in the UAE.

🟨Key insights include:

✅How to attribute income accurately within a corporate tax group.
✅Methods for fairly assessing taxable income among group members.
✅UAE CT rules and guidelines for tax attribution.
✅Strategies for tax compliance and reducing tax liabilities.
✅Common challenges and best practices in income attribution.

⚡This video is designed for business owners, tax professionals, and financial advisors looking to optimize their understanding of corporate tax group management. Subscribe for more insights on UAE tax regulations, income assessment, and corporate tax strategies.

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Even though the parent company is tasked with calculating the tax group taxable income, but the tax group is still obligated to calculate the individual entity's taxable income at an arm's length basis in these specific situations.

Firstly, within a tax group, a member with unutilized pre-grouping tax losses can offset these losses up to 75% of the group taxable income, if member has adequate taxable income. Secondly, if a member generates income for which the tax group can claim a foreign tax credit, the credit cannot exceed the corporate tax due on the member's relevant income, and it cannot be carried forward. Thirdly, if a member benefits from corporate tax incentives related to qualifying business activities based on the member's taxable income. Lastly, a member with unutilized carried forward pre-grouping net interest expenditure can adjust it up to 30% of the tax group's EBITDA or 12 million whichever is higher, provided the member has sufficient taxable income. In all these scenarios, it is mandatory to calculate the taxable income of each individual tax member, involving the attribution of income between the members of the tax group based on an arm’s length basis.

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