UAE Corporate Tax Update 2025: Audited Financial Statement Rules Refined
The UAE’s Corporate Tax (CT) regime, in effect since June 1, 2023, continues to evolve in line with global tax practices and the nation’s commitment to financial transparency. The latest development—Ministerial Decision No. 84 of 2025—brings clarity and structure to the requirements for audited financial statements, affecting a wide range of businesses across the UAE.
Who Must Prepare Audited Financial Statements?
Under the new directive, the following entities must now prepare and maintain audited financial statements in compliance with International Financial Reporting Standards (IFRS):
• Taxable persons (not part of a tax group) with annual revenue exceeding AED 50 million.
• Qualifying Free Zone Persons (QFZPs) – regardless of revenue – to maintain the 0% tax rate on qualifying income.
These financials must be audited by a UAE-licensed auditor, and businesses must submit the auditor’s details and Corporate Tax Registration Number (TRN) in their tax return, along with disclosing any audit qualifications.
What About Tax Groups?
A significant refinement introduced by Ministerial Decision No. 84/2025 is for tax groups. Instead of requiring separate audits for each entity within the group, the law mandates audited special purpose consolidated financial statements for the group as a whole.
• This aims to streamline compliance, reduce administrative effort, and still uphold consistent reporting standards.
• The FTA will release specific rules and formats for these special purpose statements in due course.
• This aims to streamline compliance, reduce administrative effort, and still uphold consistent reporting standards.
• The FTA will release specific rules and formats for these special purpose statements in due course.
Additional Compliance for Free Zone Distributors
QFZPs engaged in distribution of goods or materials in or from a Designated Zone, under Ministerial Decision No. 265 of 2023, must comply with any additional procedures set by the Authority.
Small Business Relief Still in Play
For small businesses with revenue below AED 3 million, the Small Business Relief remains valid until December 2026, and cash-basis accounting is permitted. However, these entities must still retain records for at least seven years.
Why Early Compliance Matters
Whether you’re a mainland business, free zone entity, offshore entity, or part of a tax group, proactive tax preparation is key to avoiding penalties and audit complications. Early action allows you to:
• Verify financials and make final tax adjustments
• Review related party transactions
• Prepare Transfer Pricing documentation, if required
• Minimize last-minute stress and ensure smooth submissions
• Verify financials and make final tax adjustments
• Review related party transactions
• Prepare Transfer Pricing documentation, if required
• Minimize last-minute stress and ensure smooth submissions
At Fiscal Bricks, we specialize in corporate tax advisory and compliance. Our experienced team helps businesses stay ahead of regulatory changes, offering practical solutions tailored to your entity type and tax obligations.