Three groups must have audited financial statements for UAE corporate tax: a taxable person outside a tax group with revenue above AED 50 million, every Qualifying Free Zone Person, and every tax group. The rule comes from Ministerial Decision No. 84 of 2025 and applies to tax periods starting on or after 1 January 2025. The audited statements are filed with the corporate tax return, within nine months of the financial year-end.
| Quick facts | |
|---|---|
| Governing rule | Ministerial Decision No. 84 of 2025, under Article 54 of Federal Decree-Law No. 47 of 2022 |
| Applies from | Tax periods starting on or after 1 January 2025 |
| Revenue threshold | Above AED 50 million (not for QFZPs or tax groups) |
| Tax groups | Audited special purpose aggregated statements, FTA Decision No. 7 of 2025 |
| Deadline | With the corporate tax return, 9 months after year-end |
| Record retention | 7 years after the end of the tax period |
Who Needs Audited Financial Statements for Corporate Tax?
Ministerial Decision No. 84 of 2025 names three categories. It replaced Ministerial Decision No. 82 of 2023, which still governs tax periods that started before 1 January 2025.
| Your position | Audit required for CT? | Note |
|---|---|---|
| Standalone taxable person, revenue above AED 50 million | Yes | Revenue is tested per tax period |
| Qualifying Free Zone Person | Yes, at any revenue | A condition of keeping the 0% rate |
| Tax group | Yes, at any revenue | Audited aggregated statements for the group |
| Member of a tax group | No standalone audit for CT | Other laws may still require one |
| Non-resident with a UAE permanent establishment | Yes, if PE revenue is above AED 50 million | Only revenue through the UAE PE or nexus counts |
| Free zone person taxed at 9%, revenue AED 50 million or less | No | Your free zone may still require it |
| Mainland business, revenue AED 50 million or less | No | Check the Commercial Companies Law and bank terms |
Expert note · Farahat Tax Team
If you sit below AED 50 million and outside a group, corporate tax law does not require an audit. That is a narrow answer. Before you drop the audit, check three things: your free zone licence conditions, your bank facility letter, and whether your revenue could cross AED 50 million in a strong year.
What Changed for Tax Groups in 2025
Under Ministerial Decision No. 82 of 2023, a tax group fell into the audit rule only through the AED 50 million test. Since 1 January 2025, every tax group must prepare and maintain audited special purpose financial statements, whatever its revenue.
FTA Decision No. 7 of 2025 sets the form. The group prepares aggregated financial statements:
- built from the standalone statements of each member, line by line
- with transactions between group members eliminated
- using uniform accounting policies across all members
- presented in AED
- audited under International Standards on Auditing for a special purpose framework
FTA Public Clarification CTP007 (September 2025) confirms the audited aggregated statements are submitted with the group’s tax return. Members do not need separate audited standalone statements for corporate tax.
Expert note · Farahat Audit Team
Aggregated statements cannot start until every member’s standalone accounts are closed. One late subsidiary holds up the whole group. Set the members’ close date at least two months before the group audit is due to begin.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
What the Audit Report Covers, and What It Doesn’t
The audit report gives an independent opinion on the financial statements. It states whether they present a true and fair view under the applicable accounting standards. It is not an opinion on the corporate tax return. The return, its adjustments and its taxable income figure remain the taxpayer’s responsibility.
The two still connect directly. The corporate tax return captures the auditor’s name and the audit opinion where statements are audited. A qualified opinion is therefore visible to the FTA in the return itself.
This is also different from an FTA tax audit. A tax audit is the FTA’s own review of your compliance under the Tax Procedures Law. The audit report discussed here is the statutory audit of your accounts by a licensed auditor.
Which Accounting Standards the Statements Must Follow
Ministerial Decision No. 114 of 2023 sets the standards used for corporate tax:
| Revenue in the tax period | Standard |
|---|---|
| Above AED 50 million | IFRS |
| AED 50 million or less | IFRS for SMEs permitted |
| AED 3 million or less | Cash basis permitted |
If you must be audited, the auditor reports against the standard you prepared under. Choose it before year-end, not during the audit.
When the Audit Has to Be Finished
The return and the audited statements are due nine months after your financial year-end. The audit must be signed before you can file.
| Financial year ends | Return and audited statements due |
|---|---|
| 31 December 2025 | 30 September 2026 (passed) |
| 31 March 2026 | 31 December 2026 |
| 30 June 2026 | 31 March 2027 |
| 31 December 2026 | 30 September 2027 |
Expert note · Farahat Audit Team
The mistake we see most is treating the audit and the tax return as one task in month eight. They are two jobs in sequence. Start fieldwork within three months of year-end, so the signed report is ready with time left for the tax computation.
What Happens If a QFZP Has No Audited Accounts
Audited financial statements are one of the conditions for Qualifying Free Zone Person status. A free zone person that fails a condition loses QFZP status. It is then taxed at 9% for that tax period and the following four tax periods.
Expert note · Farahat Tax Team
Our view: for a QFZP, the audit is part of the cost of the 0% rate, not a separate compliance chore. Missing it once can cost five years of the rate. Budget for it in the same line as your licence renewal.
How to Be Audit-Ready Before You File
- Confirm your category for this tax period. Revenue, QFZP status and group membership can change year to year.
- Appoint a licensed auditor early. The auditor must be registered with the Ministry of Economy. If your free zone keeps an approved auditor list, the firm must be on it.
- Close the books properly. Reconciled bank accounts, a fixed asset register, a related party schedule, receivable and payable confirmations, and inventory counts where relevant.
- For tax groups, align the members. Same accounting policies, same close timetable, and an elimination schedule for intra-group transactions.
- Review the draft statements and adjustments before the report is signed.
- File the return with the audited statements before the nine-month deadline.
Expert note · Farahat Audit Team
Before you book the auditor, check your fixed asset register and related party balances. These two items stall more first-year audits than anything else, because they often have to be rebuilt from invoices and bank records.
Records and Penalties
Article 56 of the Corporate Tax Law requires you to keep the records behind each return, including the audited statements, for 7 years after the end of the tax period. Where a refund claim is still pending with the FTA, Cabinet Decision No. 17 of 2026 (in force 1 April 2026) adds two further years of retention.
Penalties under Cabinet Decision No. 75 of 2023:
| Violation | Penalty |
|---|---|
| Failure to keep required records | AED 10,000; AED 20,000 for a repeat within 24 months |
| Failure to submit records in Arabic when requested | AED 5,000 |
| Late tax return | AED 500 per month for 12 months, then AED 1,000 per month |
Audits You May Need Even When Corporate Tax Doesn’t Require One
Corporate tax is only one source of audit obligations. Many free zone authorities require audited accounts to renew a licence. Mainland companies appoint an auditor under the Commercial Companies Law, Federal Decree-Law No. 32 of 2021. Banks, tenders and investors often ask for audited accounts too. A “no” under Ministerial Decision No. 84 of 2025 does not mean no audit.
When to Bring in an Auditor
If you fall into one of the three categories, appoint your auditor in the first quarter after year-end. If you are a tax group, start earlier, because aggregation depends on every member closing first. Farahat’s external audit services cover statutory audits, QFZP audits and tax group aggregated statements.
Need Expert Advice?
Contact the team at Farahat & Co. for professional support and expert insights for businesses operating in the UAE.
Frequently Asked Questions (FAQs)
Who needs audited financial statements for UAE corporate tax?
Does every tax group need an audit, even below AED 50 million?
Does the auditor sign off on my corporate tax return?
When must audited statements be submitted to the FTA?
Do free zone companies taxed at 9% need an audit?
What happens if a Qualifying Free Zone Person skips the audit?
Sources: Ministerial Decision No. 84 of 2025; FTA Decision No. 7 of 2025; FTA Public Clarification CTP007; Ministerial Decision No. 114 of 2023; Federal Decree-Law No. 47 of 2022, Articles 18, 54 and 56; Cabinet Decision No. 75 of 2023; Cabinet Decision No. 17 of 2026.
