UAE CT: Qualifying Group Relief I Secrets of Qualifying Group Relief

In our preceding article, we examined the discretionary aspect of Qualifying Group Relief (QGR) and segmented our examination into three primary phases: pre-transfer, transfer, and post-transfer. We delved into the qualification criteria during the pre-transfer stage, the terms of the transfer phase, and the events that lead to the clawback of QGR in the post-transfer phase. The prior discourse offered a general outline of these prerequisites, while the current article concentrates on an in-depth exploration of critical aspects of QGR.
QGR necessitates that both the transferor and transferee are juridical resident persons or Permanent Establishments (PE) of non-resident persons and are part of the same Qualifying Group. Furthermore, both are taxable persons; or become taxable person as result of this transfer. These criteria imply that certain entities, such as government entities, natural person even with an annual income exceeding one million Dirham, and non-residents, are not eligible for QGR benefits. Nevertheless, two PEs, even if one serves as the transferor and the other as the transferee, may qualify for QGR provided they satisfy all other requirements.
The legislation mandates a minimum of 75% common ownership, where either the transferor holds at least 75% of the equity or equitable interest in the transferee, or the transferee holds the same in the transferor, or another person owns at least 75% of the equity or equitable interest in both the transferor and transferee (acting as a common shareholder). This common shareholder could be any person, including individual, non-resident person, exempt person, taxable or non-taxable person etc.