diff --git a/azure/services/groups/spec.go b/azure/services/groups/spec.go
index bc8bcc686d4..6cfea74efff 100644
--- a/azure/services/groups/spec.go
+++ b/azure/services/groups/spec.go
@@ -56,13 +56,13 @@ func (s *GroupSpec) Parameters(existing interface{}) (params interface{}, err er
 	}
 	return resources.Group{
 		Location: to.StringPtr(s.Location),
-		// We create only CAPZ default tags. User defined additional tags
-		// are created and updated using tags service.
+		// User defined additional tags are created with the resource group and updated using tags service.
 		Tags: converters.TagsToMap(infrav1.Build(infrav1.BuildParams{
 			ClusterName: s.ClusterName,
 			Lifecycle:   infrav1.ResourceLifecycleOwned,
 			Name:        to.StringPtr(s.Name),
 			Role:        to.StringPtr(infrav1.CommonRole),
+			Additional:  s.AdditionalTags,
 		})),
 	}, nil
 }