The Ministry of Finance issued Ministerial Decision No. 84 of 2025 determining which businesses must prepare audited financial statements in accordance with the UAE Corporate Tax system. The decision is effective for tax periods beginning on or after 1 January 2025, and supports the implementation of Federal Decree-Law No. 47 of 2022. It replaces previous rules and provides businesses with a clear understanding of when audited accounts are required.
The reason for the decision is simple. The Federal Tax Authority (FTA) needs trustworthy financial information to review Corporate Tax returns. Audited financial statements help verify that the numbers a business provides are correct and supported by the right records. This makes the tax filing more accurate and reduces the chances of mistakes.
This article explains who has to prepare audited financial statements, what the rules mean for different types of businesses, how long records must be kept, and how professional tax firms can help companies meet their obligations.
Also check: Corporate Tax Audit in UAE
Why Ministerial Decision No. 84 of 2025 Matters?
Audited financial statements give the FTA confidence that the financial information of a business is complete and reliable. They show the revenue that the business earned, the costs that were incurred, and how the profit was calculated. This information needs to be clear and consistent for Corporate Tax purposes.
Many companies already produce audited accounts for banks, investors, or internal governance. Audited accounts are also a tax requirement for some categories of taxpayers according to Ministerial Decision No. 84 of 2025. This helps create a stable and transparent tax environment in the UAE.
Who Needs to Prepare Audited Financial Statements?
The decision identifies three categories of taxpayers that are obliged to prepare audited financial statements.
Taxable Persons with Revenue Exceeding AED 50 Million
If the annual revenue of a Taxable Person who is not part of a Tax Group is above AED 50,000,000, it must prepare audited financial statements. The threshold of AED 50 million revenue ensures that larger companies maintain a high level of financial accuracy.
Most companies that reach this threshold prepare corporate tax financial statements in accordance with standard accounting practices. The FTA uses these audited accounts to confirm taxable income and to review any adjustments made during the tax period.
For non-resident businesses, only revenue earned through a Permanent Establishment or nexus in the UAE counts toward the AED 50 million threshold. This clarification prevents foreign entities with limited UAE activity from being subject to unnecessary audit requirements.
Qualifying Free Zone Persons (QFZPs)
All Qualifying Free Zone Persons (QFZPs) are required to prepare audited financial statements regardless of their revenue falling below the AED 50 million threshold. This requirement is in line with the Free Zone Corporate Tax regime, which allows QFZPs to benefit from a 0% tax rate on qualifying income.
Audited accounts help check that the business continues to meet the terms for QFZP status. Free Zone companies adjust their accounting systems to make sure they are compliant with the rules issued by the Ministry of Finance in UAE and the FTA.
Tax Groups (Special Purpose Financial Report)
Tax Groups are required to prepare audited Special Purpose Financial Statements (SPFS). These statements are in certain formats and follow rules established by the FTA.
For Corporate Tax purposes, a Tax Group is seen as a single taxable entity, even if it includes a number of companies under it. SPFS helps to ensure that the group’s consolidated financial information is set out clearly and consistently. This gives the FTA a view of the financial position of the whole UAE Tax Group structure.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
Additional Procedures for Free Zone Distributors
Ministerial Decision No. 84 of 2025 also states that QFZPs engaged in distribution activities in or from a Designated Zone must comply with additional procedures prescribed by the FTA.
These additional procedures were later defined in FTA Decision No. 6 of 2026, which introduced the mandatory Agreed-Upon Procedures (AUP) Report. The AUP Report must be prepared by an independent auditor licensed in the UAE and performed under ISRS 4400.
This requirement ensures that distribution-based QFZPs can prove:
- Their customers are resellers
- Their imports enter through a Designated Zone
What Are the Record Retention Rules?
Corporate Tax Law requires companies to keep their accounting records and supporting documents for a period of seven years after the end of the tax period. This includes:
- Audited financial statements
- Invoices and agreements
- Bank statements
- Inventory and warehouse records
- Corporate resolutions
- Import and export documents
- Any documents relied upon in preparing the tax return
This corporate tax record retention rule enables the FTA to look back to past tax periods if needed. It also helps businesses maintain organized financial records over time.
Related: Corporate Tax Services in UAE
What Does This Mean for Businesses?
Ministerial Decision No. 84 of 2025 has a number of practical implications for companies operating in the UAE.
Specific Audit Requirements
Audited financial statements must be prepared by large companies, QFZPs, and Tax Groups. This is to ensure transparency and minimize the risk of errors in Corporate Tax filings.
Stricter Compliance Standards
Audited accounts also help companies prove they are complying with the Corporate Tax Law. This minimizes the risk of penalties or disputes with the FTA.
Improved Internal Control
The requirement to provide audited accounts encourages businesses to keep organized records, use consistent accounting practices, and maintain clear documentation.
Alignment With Ministry of Finance Policies
The decision is in line with the broader Corporate Tax regime introduced by the Ministry of Finance. This guarantees that businesses in the UAE follow the same reporting standards.
Conclusion
Ministerial Decision No. 84 of 2025 is a core part of the UAE Corporate Tax system. It clearly defines who must prepare audited financial statements and also serves as a reminder to keep financial records for seven years. By knowing these requirements and working with qualified tax advisors, businesses can fulfill their obligations with confidence and stay fully compliant with the Corporate Tax Law.
See also: Corporate Tax Consultant
Frequently Asked Questions (FAQs)
What is Ministerial Decision No. 84 of 2025?
Who must prepare audited financial statements?
Do QFZPs need audited accounts even if revenue is low?
What are Special Purpose Financial Statements (SPFS)?
How long must businesses keep their records?
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
How Farahat & Co. Can Help
Meeting the requirements of Ministerial Decision No. 84 of 2025 can be challenging, especially for businesses new to Corporate Tax. Farahat & Co assists your company by reviewing the accounting system to make sure it provides the accurate data needed for the UAE Corporate Tax audit, preparing audited financial statements in the UAE with high accuracy and in a timely manner, helping QFZPs with appropriate documentation and ongoing compliance requirements, drafting Special Purpose Financial Statements (SPFS) for Tax Groups, ensuring the revenue calculations are aligned with the revenue threshold of AED 50 million, and providing guidance on long-term documentation and retention practices.
Contact Farahat & Co. today to prepare your Corporate Tax position and ensure full compliance with UAE regulations.
