As the UAE’s corporate tax regime matures, many businesses are realizing that group structures, mergers, and internal reorganizations now carry serious tax implications. What used to be simple internal transfers could, under the new rules, trigger corporate tax unless handled with care.
This is where structuring relief provisions come into play. When used correctly, they allow companies to reorganize without facing immediate tax costs provided they meet all the compliance conditions. For businesses preparing for corporate tax filing, understanding these reliefs isn’t optional, it’s essential.
At Dos Hermanos, we see increasing demand from companies who want to align their restructuring strategies with tax regulations while still focusing on growth.
Why Structuring Relief Matters
The UAE has introduced detailed provisions under its corporate tax framework that affect how businesses handle intra-group transfers and reorganizations. Relief is available, but only if transactions meet specific criteria.
For example:
- Group relief under Article 26 allows certain losses and gains to be deferred.
- Reorganization relief under Article 27 lets qualifying mergers or asset transfers proceed without triggering immediate tax.
However, these benefits aren’t automatic. They require proper documentation, compliance with conditions, and long-term alignment with regulations. According to PwC Middle East, regulators are scrutinizing these transactions closely, making expert guidance more critical than ever.
Transfer Pricing at the Heart of Compliance
Transfer pricing rules ensuring intercompany transactions are conducted at arm’s length add another layer of complexity. Businesses must prepare TP compliance documents that justify how they price intercompany transfers, or risk penalties.
For companies exploring transfer pricing advisory services or dealing with intercompany transfer pricing, this means building policies that can withstand audit scrutiny. Beyond documentation, it’s about developing strategies that ensure your structure remains sustainable as regulations evolve.
How Relief Impacts Business Restructuring
Relief provisions influence everything from asset transfers to mergers. Without proper planning, businesses may face tax liabilities or compliance penalties. With planning, however, restructuring can actually enhance efficiency and unlock growth.
This is where advisory comes in. Services like company setup and structuring or expert financial guidance help organizations redesign their operations to remain tax-efficient while meeting strategic goals.
Checklist for Businesses
To qualify for structuring relief and avoid compliance pitfalls, businesses should focus on:
- Understanding the law – know the exact requirements of Articles 26 & 27.
- Documenting transactions – ensure every transfer has supporting records.
- Aligning with transfer pricing rules – intercompany dealings must be justified.
- Preparing for audits – engage audit preparation and coordination services to be ready for external reviews.
- Staying compliant long term – relief can be clawed back if conditions are broken later.
The OECD has also highlighted in its BEPS compliance framework that regulators worldwide are demanding greater transparency. This reinforces the importance of proactive planning rather than reactive fixes.
Beyond Restructuring: Connected Compliance
Structuring relief is not an isolated issue. It links to broader areas of compliance such as regulatory compliance, AML compliance services, and even ongoing regulatory risk and compliance advisory.
For businesses handling excise tax consulting services or planning for free zone license renewal, integrated compliance frameworks ensure that relief is achieved without triggering risks in other areas.
Conclusion
The UAE’s corporate tax era has transformed how businesses approach group structures and reorganizations. Structuring relief offers opportunities, but only if companies plan ahead, document carefully, and align with transfer pricing and audit requirements.
For businesses exploring taxation services or seeking tailored services, expert guidance makes all the difference. At Dos Hermanos, we help clients navigate restructuring, tax relief, and compliance, ensuring they stay efficient, compliant, and ready for growth.
Dos Hermanos is your trusted partner for tax planning, restructuring, and compliance in the UAE’s new tax era.
