New requirements for audited financial statements in the UAE

The UAE’s Corporate Tax (CT) regime, effective from June 1, 2023, has evolved with recent updates to enhance financial transparency. The latest Ministerial Decision No. 84 of 2025, issued by the UAE Ministry of Finance, refines the requirements for audited financial statements, aligning with global tax compliance standards while maintaining a business-friendly environment.

Taxable persons that is not a tax group with annual revenue exceeding Dh50 million or those classified as Qualifying Free Zone Persons (QFZPs) must prepare audited financial statements. QFZPs, regardless of revenue, require audits to maintain the 0 per cent tax rate on qualifying income. These statements must comply with International Financial Reporting Standards (IFRS) and be audited by a UAE-licensed auditor.

A key update in Ministerial Decision No. 84 of 2025 mandates tax groups to prepare audited special purpose financial statements, in accordance with the form, procedures, and rules specified by the authority which are yet to be released, streamlining reporting without requiring individual entity audits within the tax group. This reduces administrative burdens while ensuring consistency.

A Qualifying Free Zone Person engaged in the distribution of goods or materials in or from a Designated Zone, in accordance with Ministerial Decision No. 265 of 2023, must comply with any additional procedures prescribed by the Authority.

A taxable person must provide the auditor’s details and Corporate Tax TRN in their tax return and disclose any qualifications noted in the audit report.

Failure to comply with these requirements may lead to penalties under the Tax Procedures Law.

Small businesses with annual revenue below Dh3 million may benefit from cash-basis accounting and/or the Small Business Relief, which remains applicable until December 2026. All entities are required to retain financial records for a minimum of seven years.

Whether you’re a free zone entity, mainland entity, small business or an offshore entity, or part of a larger group — don’t leave compliance to the last minute. Early preparation helps you:

Verify financials and finalise tax adjustments

Review related party transactions thoroughly

Prepare Transfer Pricing documentation, if required

Steer clear of last-minute stress and penalties