UAE Qualifying Group Relief and Restructuring Relief 2026

For any UAE group that needs to move a building, a license, a trademark or a whole division from one company to another: the two reliefs that stop the move triggering a 9% tax charge, the election that locks you in, and the two-year rule that can undo the whole thing.

Two reliefs in the UAE Corporate Tax Law let assets and businesses move between related companies without a taxable gain. Qualifying Group Relief under Article 26 covers individual assets and liabilities between companies linked by 75% ownership. Business Restructuring Relief under Article 27 covers the transfer of a whole business, or an independent part of one, in exchange for shares. Both transfer at net book value, both require an election, and both are clawed back at market value if the assets or the shares leave the group within two years.

This guide works from Articles 26 and 27 of Federal Decree-Law No. 47 of 2022 and from the FTA’s Qualifying Group Relief Corporate Tax Guide, CTGQGR1, which carries the election mechanics from Ministerial Decision No. 132 of 2023. Neither relief is the same thing as a tax group, and the difference is covered in our guide to UAE corporate tax groups.

Which Relief Applies to Which Move

The first question is not whether you qualify. It is which of the two you are actually doing, because the conditions differ and so does the consideration you can take.

	Qualifying Group Relief (Article 26)	Business Restructuring Relief (Article 27)
What moves	One or more assets or liabilities held on capital account	An entire business, or an independent part of a business
Ownership link required	75% direct or indirect, either way or through a common parent	No ownership threshold, but consideration must be shares
Consideration	Deemed equal to net book value	Shares or other ownership interests in the transferee
Commercial purpose test	Not stated in Article 26	Yes, valid commercial or non-fiscal reasons reflecting economic reality
Losses follow the transfer	No	Yes, subject to conditions set by the Minister
Clawback window	Two years	Two years

Qualifying Group Relief: The Six Conditions

Article 26(1) provides that no gain or loss needs to be taken into account in determining taxable income on the transfer of assets or liabilities between two taxable persons that are members of the same qualifying group. Article 26(2) then defines a qualifying group through six conditions that must all hold.

Both are juridical persons that are UAE residents, or non-residents with a permanent establishment in the UAE. A natural person conducting a business cannot use the relief.
A 75% ownership link. Either one taxable person holds at least 75% of the other directly or indirectly, or a third person holds at least 75% of each of them.
Neither is an exempt person.
Neither is a Qualifying Free Zone Person. A free zone company enjoying the 0% rate on qualifying income is outside the relief entirely. Our guide to free zone qualifying income covers what that status requires.
The same financial year end.
The same accounting standards.

The 75% threshold is the same figure used for transferring tax losses under Article 38, but the two mechanisms are separate and one does not imply the other.

What Is Qualifying Group Relief in the UAE?

A corporate tax relief under Article 26 of Federal Decree-Law No. 47 of 2022 that lets assets and liabilities move between UAE companies linked by at least 75% ownership without a taxable gain or loss. The asset transfers at net book value, the consideration is deemed to equal that value, and the relief is reversed at market value if the asset leaves the group or the ownership link breaks within two years.

Only Capital Account Assets Qualify

This is the restriction that catches groups first, and it does not appear in Article 26 itself. The FTA’s Qualifying Group Relief Guide, citing Article 3(4) of Ministerial Decision No. 132 of 2023, states that the relief applies only to the transfer of assets or liabilities held on capital account and recorded on the balance sheet of the transferor.

Inventory transferred as part of regular business operations is outside the relief. So is anything the transferor holds on revenue account. For those transfers the ordinary rules apply, including the arm’s length standard on transactions between related parties, which is covered in our guide to transfer pricing in the UAE for small and medium businesses.

A second exclusion sits in Ministerial Decision No. 116 of 2023. Where assets or liabilities pass to a taxable person as a result of liquidation, dissolution or merger, so that an entity ceases to have legal existence, Qualifying Group Relief does not apply. Groups winding a company down should read our guide to liquidating a mainland company in Dubai before assuming assets can be moved out under Article 26 on the way.

How the Transfer Is Valued

Article 26(3) does two things at once. The asset or liability is treated as transferred at its net book value at the time of transfer, so neither a gain nor a loss arises, and the value of any consideration paid or received is deemed to equal that same net book value.

The second half matters more than it looks. You cannot elect the relief and also record a commercial price. Whatever the group agrees between itself, the tax outcome is fixed at book value on both sides, which means the transferee inherits the transferor’s tax base and continues depreciating from it rather than from a stepped-up figure.

The Election, and Why It Is Bigger Than One Transfer

The no gain or loss treatment is not automatic. Under Article 3 of Ministerial Decision No. 132 of 2023, as set out in the FTA guide, the transferor must make an election to apply Article 26, and the election is made in the tax return for the tax period in which the first such transfer takes place.

Three consequences follow, and each one has caught groups out.

The election is irrevocable. Once made, it cannot be reversed without the FTA’s approval.
It is not transfer-specific. It applies to all transfers of capital account assets and liabilities by that transferor within the qualifying group in that tax period and in every subsequent tax period. You are electing a policy, not a transaction.
Each transferor elects for itself. An election by one member does not bind another member that later transfers the same asset, unless that member has made its own election, with a narrow exception for asset exchanges under Article 4 of the same Ministerial Decision.

An election is only valid if it is made for a transfer that actually meets the conditions. If an audit later shows the conditions were not met, the election is treated as invalid and every return that applied the relief on the assumption it was valid is incorrect. A fresh election can then be made in a later period where the conditions are satisfied, but a validly made election cannot be repeated in subsequent periods. If a return has to be corrected, the mechanism is in our guide to UAE tax penalties and voluntary disclosure.

The Two-Year Clawback

Article 26(4) withdraws the relief if either of two things happens within two years of the date of transfer: the asset or liability is transferred again outside the qualifying group, or the two taxable persons cease to be members of the same qualifying group.

Article 26(5) then sets the consequence. The original transfer is treated as having taken place at market value at the date of that transfer, for the purposes of determining the taxable income of both parties for the relevant tax period. This is retrospective, not prospective. A group that moved a property at a book value of AED 8 million and sold the holding company eighteen months later is looking back at the original transfer and recomputing it at the market value it had then.

Note the second trigger carefully. It is not limited to selling the asset. Any event that breaks the 75% ownership link inside two years, including bringing in an outside investor at 30%, will do it.

Business Restructuring Relief: Two Transactions

Article 27(1) covers two specific shapes of transaction, and nothing else.

The first is where a taxable person transfers its entire business, or an independent part of its business, to another person who is or becomes a taxable person as a result, in exchange for shares or other ownership interests in the transferee. The transferor survives.

The second is where one or more taxable persons transfer their entire business to another taxable person in exchange for shares or ownership interests, and the transferors cease to exist as a result. This is the merger case.

Article 27(4) extends the relief, as the context requires, where the shares are received by someone other than the transferor, where they are issued by someone other than the transferee, and where a partner in an unincorporated partnership treated as a taxable person receives no shares at all.

The Seven Conditions, Including the One That Is a Judgment Call

Article 27(2) sets the conditions. Six of them mirror Qualifying Group Relief and are mechanical: the transfer must comply with the applicable UAE legislation, both must be UAE residents or non-residents with a UAE permanent establishment, neither can be an exempt person, neither can be a Qualifying Free Zone Person, the financial years must end on the same date, and the accounting standards must match.

The seventh is different in kind. The transfer must be undertaken for valid commercial or other non-fiscal reasons which reflect economic reality. There is no safe harbour, no percentage and no list. A restructuring whose only discernible purpose is to move a gain out of the tax net does not qualify, and the burden of showing the commercial rationale sits with the taxpayer. Board minutes written at the time are worth more than a memorandum written after an FTA query arrives.

Shares, Values and Losses on a Restructuring

Article 27(3) fixes what happens next. The assets and liabilities transfer at net book value so that no gain or loss arises. The value of the shares received cannot exceed the net book value of the assets transferred and liabilities assumed, less the value of any other consideration received. Where an entire business is exchanged for shares and the transferor ceases to exist, the value of the shares received cannot exceed the book value of the shares surrendered, less any other consideration.

The provision that has no equivalent in Article 26 is paragraph (d). Unutilized tax losses incurred by the transferor before the tax period in which the transfer completes may become carried forward tax losses of the transferee, subject to conditions prescribed by the Minister. Article 27(5) narrows this where only an independent part of a business moves: only losses that can reasonably be attributed to that part can follow it. The wider loss rules are covered in our guide to tax losses under UAE corporate tax and the 75% cap.

The Restructuring Clawback Is Wider

Article 27(6) removes the relief if, within two years of the transfer, either of two things happens. The first is a sale, transfer or other disposal, in whole or in part, of the shares or ownership interests in the transferor or the transferee to a person outside the qualifying group to which the relevant taxable persons belong. The second is a subsequent transfer or disposal of the business or the independent part that was transferred.

Article 27(7) then treats the original transfer as having taken place at market value at its date. The share-level trigger is the one to plan around: a restructuring done to prepare a division for sale, followed by the sale of shares to a buyer within two years, is precisely the sequence that reverses the relief.

What Happens If Assets Leave the Group Within Two Years?

The relief is withdrawn and the original transfer is recomputed at the market value it had on the date it took place, under Article 26(5) or Article 27(7). The recomputation affects the taxable income of both parties for the relevant tax period, so the tax cost lands on a period that has usually already been filed.

When Both Reliefs Are Available

The FTA guide sets out the overlap. A transaction can qualify for both where a transferor transfers its business or an independent part of it to a transferee, the transferor continues to exist after the transfer, the consideration is paid in shares or ownership interests of the transferee or of a person holding at least 50% in the transferee, and both are members of a qualifying group.

Where the transferor has already elected for Qualifying Group Relief, that election continues to apply to the capital account assets moving as part of the restructuring, because the election covers all future transfers. Deciding which relief to rely on is not a formality in that situation, and it is the point at which professional advice earns its fee.

What to Get Right Before the Transfer

Most failures here are administrative rather than analytical. Four items decide whether the relief holds up.

Align financial year ends and accounting standards first. Both are conditions in Articles 26 and 27, and neither can be fixed retrospectively on the day of a transfer.
Document the net book value. Article 6 of Ministerial Decision No. 132 of 2023 requires both transferor and transferee to keep a record of the transfer agreement and evidence of the value prescribed under Article 26, and the transferee must document what it needs for the adjustments under Ministerial Decision No. 134 of 2023.
Write down the commercial reason before you restructure. Article 27(2)(g) is a test of economic reality, and contemporaneous evidence is the only kind that carries weight.
Diary the two-year date. Both clawbacks run from the date of transfer, and both are triggered by ordinary commercial events, not by aggressive planning.

Two limitations are worth stating. The reliefs are set out in the Decree-Law, but the operative detail sits in Ministerial Decisions Nos. 116, 132 and 134 of 2023 and in the FTA guides, which are updated more often than the law. And the interaction between these reliefs and the free zone regime is more complicated than the bare exclusion of a Qualifying Free Zone Person suggests, particularly where a company elects out of the free zone regime. Confirm your position with the Federal Tax Authority or a registered tax agent before a transfer, not after.

Frequently Asked Questions

What is Qualifying Group Relief in the UAE?

A relief under Article 26 of Federal Decree-Law No. 47 of 2022 that lets assets and liabilities move between UAE companies linked by at least 75% ownership without a taxable gain or loss. The asset transfers at net book value, the consideration is deemed to equal that value, and the relief is reversed at market value if the asset leaves the group or the ownership link breaks within two years.

What is the ownership threshold for Qualifying Group Relief?

At least 75%, held directly or indirectly. Either one taxable person holds 75% or more of the other, or a third person holds 75% or more of each of them. Both must also be UAE resident juridical persons or non-residents with a UAE permanent establishment, neither exempt nor a Qualifying Free Zone Person, with matching financial year ends and accounting standards.

Do I have to elect for Qualifying Group Relief, or is it automatic?

You have to elect. Under Article 3 of Ministerial Decision No. 132 of 2023, the transferor makes the election in the tax return for the period in which the first qualifying transfer takes place. The election is irrevocable without FTA approval and applies to all subsequent transfers of capital account assets and liabilities by that transferor within the qualifying group.

Does Qualifying Group Relief apply to inventory?

No. The relief applies only to assets and liabilities held on capital account and recorded on the transferor’s balance sheet. Inventory transferred as part of regular business operations falls outside it, and the ordinary rules apply instead, including the arm’s length standard on transactions between related parties.

What is Business Restructuring Relief?

A relief under Article 27 covering two transactions: the transfer of an entire business or an independent part of it in exchange for shares in the transferee, and the transfer of an entire business by one or more taxable persons who cease to exist as a result. Assets move at net book value, and the transferor’s unutilized tax losses can follow the business, subject to conditions set by the Minister.

Can a free zone company use these reliefs?

Not while it is a Qualifying Free Zone Person. Both Article 26(2)(d) and Article 27(2)(d) exclude a Qualifying Free Zone Person from the relief. The position for a free zone company that has elected out of the regime or lost qualifying status depends on the periods involved and should be confirmed with a registered tax agent.

What is the two-year rule on UAE group relief?

If within two years of the transfer the asset leaves the qualifying group, the companies cease to be members of the same group, the shares in the transferor or transferee are disposed of outside the group, or the transferred business is disposed of, the relief is withdrawn. The transfer is then treated as having taken place at market value at its original date.

Can tax losses move with a business under Business Restructuring Relief?

Yes. Article 27(3)(d) allows the transferor’s unutilized tax losses from before the tax period of the transfer to become carried forward losses of the transferee, subject to conditions prescribed by the Minister. Where only an independent part of a business moves, Article 27(5) limits this to losses reasonably attributable to that part.

Is Qualifying Group Relief the same as forming a tax group?

No. A tax group under Article 40 makes several companies file as a single taxable person, and requires 95% ownership. Qualifying Group Relief is a transaction-level relief for transfers between companies linked by 75% ownership that continue to file separately. Companies can use the relief without ever forming a tax group.

What records do I need to keep for Qualifying Group Relief?

Both transferor and transferee must keep a record of the agreement to transfer the asset or liability and evidence of the value prescribed under Article 26, under Article 6 of Ministerial Decision No. 132 of 2023. The transferee must also document what is required for the adjustments prescribed under Ministerial Decision No. 134 of 2023.

Official Sources

This article references information from the following UAE government authorities and legal sources:

This guide is for informational purposes only and is not tax or legal advice. Information is current as of August 2026. Article numbering refers to the unofficial English translation of Federal Decree-Law No. 47 of 2022 published by the Federal Tax Authority, and the operative detail on elections, exclusions and adjustments sits in Ministerial Decisions Nos. 116, 132 and 134 of 2023, which are amended more often than the law itself. Elections under these reliefs are irrevocable without FTA approval and apply beyond the transaction that prompted them, so confirm the treatment with the Federal Tax Authority or a registered tax agent before executing a transfer.

Qualifying Group Relief and Business Restructuring Relief in the UAE