How to Prepare Aggregated Financial Statements for UAE Tax Groups: A Step-by-Step Guide

When you are part of a UAE tax group, preparing financial statements is not just about addition and subtraction. It’s about following a set of strict rules that leave no room for error. Many tax groups get caught out because they use the wrong method or miss small but important details. Those mistakes can cause delays, penalties, or rejected submissions.
The good news is, there is now a clear system for preparing Aggregated Financial Statements. Follow it step by step, and submit your audited statements on time and with confidence. If you are new to this, you are recommended to take assistance from expert corporate tax agents in the UAE like Tax Gian. 

Step 1 – Collect Standalone Financial Statements

Start with the latest standalone financial statements for every member of the tax group, including the parent and each subsidiary. They must all cover the same financial year.
Make sure they are prepared under IFRS or IFRS for SMEs.

Step 2 – Align Accounting Policies

Check for differences in accounting policies between members. If they exist, adjust them so everyone is using the same policies before you start aggregating.
Uniform policies are essential for accurate figures.

Step 3 – Remove Intra-group Transactions

Go through the standalone statements and remove:

• Income between members.
• Expenses between members.
• Unrealised gains and losses between members.
• Dividends between members
• Loans, receivables, and payables between members

Also, remove any other transactions that occur only between tax group members. Do not remove transactions with companies outside the group. Take help from corporate tax agents in the UAE, if needed.

Step 4 – Handle Business Combinations Correctly

When a member has acquired another entity:

• Do not include the accounting effects from IFRS 3or IFRS 10in the aggregated statements.
• Do not record goodwill, gain on bargain purchase, or fair value adjustments from consolidated accounts.

Exception: If no separate legal entity was acquired, include all related assets, liabilities, and goodwill.

Step 5 – Address Investments and Impairments

Keep the following in mind:

• If the parent records an impairment on its investment in a subsidiary, keep it in the aggregated statements.
• If a subsidiary records an impairment on its investment in another subsidiary, also keep it.
• For non-group entities (subsidiaries, joint ventures, associates), record them at cost less impairment.

Step 6 – Aggregate Line by Line

Add up each line item from all members’ statements.
This includes:

• Assets
• Liabilities
• Income
• Expenses
• Equity item

 Apply the elimination rules from Step 3 while doing this.

Step 7 – Use the Correct Currency

Make sure that all figures are presented in the AED.  If it’s not so, then make currency adjustments if needed before aggregation.

Apply IAS 21: closing rate for balance sheet items; average/transaction rate for income statement items.

Step 8 – Prepare the Required Statements

Your Aggregated Financial Statements must include:

1. Aggregated Statement of Changes in Equity
2. Aggregated Statement of Profit or Loss
3. Aggregated Statement of Financial Position
4. Aggregated Statement of Other Comprehensive Income

Step 9 – Add the Right Disclosures

Include notes and explanations that support the figures.
  Disclosures must cover:

• The preparation framework used.
• The basis for aggregation.
• The key accounting policies, estimates, and judgments applied.
• Additional notes to help explain the numbers.
• List of all group members, with ownership percentages.
• Summary of intra-group eliminations made.

Step 10 – Arrange for Audit

The Aggregated Financial Statements must be audited under International Standards on Auditing (ISA). Book the auditor early and provide them with all working papers. Audit is mandatory even if standalone FS are not audited. If you hire a corporate tax agent in Dubai, they will handle your audits as well. 

Step 11 – Submit to the Federal Tax Authority

Submit your audited statements to the FTA within 9 months from the end of the tax period, unless the FTA sets a different date. Late submission can result in penalties.

Extra Tips for a Smooth Process

• Engage a corporate tax agent in Dubai to streamline your tax processes. 
• Give your tax and accounting team proper training on changing tax laws.
• Maintain clear records of all intra-group transactions during the year; it makes eliminations easier.
• Plan ahead so your audit can be completed well before the deadline.
• Track potential aggregation adjustments continuously, not just at year-end.

Why This Process Matters

Following this process ensures your tax group:

• Meets UAE corporate tax law requirements.
• Avoids compliance issues.
• Submits accurate and transparent financial data.

Skipping steps or rushing at the last minute can lead to costly errors. A careful, organised approach gives you the best chance of a smooth submission.

How can Tax Gian Help?

Tax Gian has professional corporate tax agents in the UAE who help businesses;

• Understand corporate tax regulations properly.
• Keep track of the changing regulations and new requirements.
• Prepare financial statements for CT filing under the new rules.
• File CT returns correctly.

Ensure overall compliance with CT laws.