Forming a Corporate Tax group changes what you compute, not only what you file. The Parent consolidates the results, the assets and the liabilities of each Subsidiary for the relevant period, eliminating transactions between members of the group. A sale from one member to another is not group income, the corresponding purchase is not group expense, and the receivable and the payable cancel. Source: Federal Decree-Law 47/2022, Art. 42(1).

The module posts no journal entries. Elimination is a report-layer, auditable construct — no member's ledger is ever touched. That sentence is worth reading twice, because it defines both what you are looking at when you run a consolidation and what you will find if you go looking for it in the accounts afterwards, which is nothing.

That design is the conservative one and it is the correct one. Each member remains a company with its own statutory books, its own auditors and its own obligations, and none of those are served by tax-driven entries appearing inside them. The elimination lives where it belongs, in the computation — visible, reproducible, and attributable to the article that requires it. When a reviewer asks to see the bridge from a member's ledger to the group figure, you show them the report; there is no second set of books to reconcile, because there is no second set of books.

Art. 4 of Ministerial Decision 301 of 2024 carves one class of transaction out of elimination, and it is the carve-out people miss. Transactions must not be eliminated to the extent that a member recognised a deductible loss on them before joining the group, until that loss is reversed in full. Elimination and a loss already claimed would otherwise combine into a benefit taken twice. Source: Ministerial Decision 301 of 2024, Art. 4.

Losses are ring-fenced in both directions when a subsidiary joins. A joining Subsidiary's pre-grouping losses become losses of the group, but they can offset only income attributable to that Subsidiary. And group losses that already existed cannot offset income attributable to a newly joined Subsidiary. The rule is symmetrical, and its effect is that joining a group never releases a loss into a larger pool. Source: Federal Decree-Law 47/2022, Art. 42(3)–(4).

Put figures on it. Falcon Interiors joins on 1 January 2025 carrying pre-grouping losses of AED 1,200,000. In the 2025 tax period, income attributable to Falcon is AED 800,000 and income attributable to the Parent is AED 3,000,000.

Check the arithmetic, because the last line is the one that surprises people. Falcon's AED 1,200,000 of pre-grouping losses can meet only Falcon's own AED 800,000, so AED 800,000 is used and AED 400,000 carries forward. The Parent's AED 3,000,000 is untouched by it — not because the loss has expired, but because Art. 42(3) attaches it to the Subsidiary that brought it in. A group expecting AED 1,200,000 of relief against AED 3,800,000 of combined income has mis-forecast its liability by a margin that will surface in a payment rather than in a report.

Art. 42(9)–(10) adds a two-year clawback, and it is a diary item. Elimination does not apply where an asset or a liability was transferred between two members and either of them leaves the group within two years of the transfer. The eliminated transaction comes back into view, and the trigger is an event that may be two tax periods away from the transaction itself. Source: Federal Decree-Law 47/2022, Art. 42(9)–(10).

The dates decide it, so date them. Falcon Interiors is back in the group from 1 January 2027, and the Parent transfers a warehouse to it on 1 June 2027, so the two-year window runs to 1 June 2029. Falcon leaving on 1 March 2029 is inside that window, and the elimination does not apply to that transfer. Falcon leaving on 1 August 2029 is outside it, and the elimination stands. Nothing about the transfer itself changes between those two dates — only the exit date changes, and the exit date is usually decided by people who no longer remember the transfer.

Periods beginning before 1 January 2025 are refused, not guessed. Set one and the module answers "…period begins before 1 January 2025". Only Ministerial Decision 301 of 2024 rule sets are supported; Ministerial Decision 125 of 2023 continues to apply to periods that began earlier, and the module will not apply one decision's rules to another decision's period. Refusing is the right behaviour here, because a silently wrong consolidation for a 2024 period would be indistinguishable from a right one until somebody asked which decision it had been computed under.

The failure mode: looking for the elimination in the ledger. It is the commonest question this module attracts, and the answer is in its own FAQ: no journal entries, ever. If your group consolidation shows an intra-group sale eliminated and the member's trial balance still shows that sale, both are correct and neither needs fixing. The place to check a consolidation is the report and the member figures behind it, and the place to check a company's accounts is the company's accounts.