UAE Ministerial Decision No. 84 of 2025: A New Era for Audited Financial Statements under Corporate Tax
The Ministry of Finance, UAE, has issued a Ministerial Decision No.84 of 2025 which is published on 14 April 2025, introducing the major updates to the maintenance of audited financial statement by the taxable persons under Federal Decree Law No.47 of 2022 on the Taxation of Corporations and Businesses (Corporate Tax Law). The new ministerial Decision is put into effect from tax periods starting on or after 01 January 2025.
Key Provisions of Ministerial Decision No. 84 of 2025
Who Must Prepare Audited Financial Statements?
Through this decision, the authority has clarified and expanded the audit requirements and categories of entities required to prepare and maintain audited financial statements.
Taxable Persons (Non-Corporate Tax Groups):
Any taxable person who is not part of a Corporate tax group. With the revenue exceeding AED 50 million during the relevant tax period must prepare and maintain audited financial statements.
Qualifying Free Zone Persons: Regardless of the revenue threshold, all the entities which are classified as Qualifying Free Zone persons must maintain an audited financial statement.
Tax Groups: Entities registered as tax groups for Corporate Tax purposes must prepare the audited financial statement in a specific manner, following procedures and rules specified by the Federal Tax Authority. Importantly, individual members of a tax group are not required to prepare separate audited stand-alone financial statements, reducing compliance burdens. The specific format for the audited financial statement for Corporate Tax group entities has yet to be published by the authority.
Here, there is a question to be answered by the authority. If a Corporate Tax group entity who is already completed the audit for the tax year ending 31 December 2024 and submitted the Corporate Tax return, will they be required to redo the audit in the specific format prescribed by the authority? The Ministerial Decision No.84 of 2025 is with effect from 01 January 2025; however, to have the comparative figures in the audited financial statement, whether the Federal Tax Authority instructs the tax group to reinstate the audit for the year 2024 in the specific format?
Special Provisions for Distribution Activities
Qualifying Free Zone persons who are engaged in the Qualifying Activity of the distribution of goods or materials in or from the Designated Zone must adhere to additional procedures prescribed by the Federal Tax Authority. Further guidance with additional procedures to be complied with by such Qualifying Free Zone persons is expected to be issued to benefit from 0% Corporate Tax on the qualifying Income
Revenue Calculation for Non-Resident Persons
For non-resident persons, only revenue derived through permanent establishments or nexuses in the UAE will count towards the AED 50 million threshold, ensuring that only UAE-sourced business activities are considered for these compliance requirements.
Repeal and Transition
Ministerial Decision No. 84 of 2025 overrides the earlier Ministerial Decision No. 82 of 2023. However, the Ministerial Decision No. 82 of 2023 will be applicable for tax periods that started before January 1, 2025, to ensure a smooth transition of businesses already following the Ministerial Decision No. 82 of 2023.
Implications for Businesses
Enhanced Clarity and Reduced Compliance Burden
The much-needed clarity has been provided through the updated requirements, especially for tax groups, by explaining that only aggregated group-level audited financial statements are necessary and that the audit statements for each individual member in the Corporate Tax group are required. The purpose of implementing these changes is to create a friendly business environment by easing the administrative and financial burden on the business.
One of the highlights of this decision is to bring the UAE's corporate tax compliance framework in line with international practices, also by having transparency and minimising risks of tax avoidance or double non-taxation, which might be a threat to other countries.
Guidance and Next Steps
We expect to receive detailed guidance from the FTA on the preparation of the aggregated financial statement and the specific procedures to be followed for distribution activities in Designated Zones.
It is recommended that every business review its structures and revenue streams to determine if they satisfy the new thresholds and requirements. Based on this, they should be prepared to implement the necessary accounting and audit processes for tax periods starting January 1, 2025.
Conclusion
The Ministerial Decision No. 84 of 2025 plays an important role in the UAE's Corporate Tax policy. This clarification and the requirement of the processes to be followed give a better idea to the UAE Taxable Persons and gives a better clarity and transparency on the global business hub. As mentioned, let us keep a watch on the upcoming guidance from the FTA to avoid penalties and ensure the regulations are followed wisely.
To learn more about UAE Ministerial Decision No. 84 of 2025 on Audited Financials, book a free consultation with one of the Flyingcolour team advisors.
Disclaimer: The information provided in this blog is based on our understanding of current tax laws and regulations. It is intended for general informational purposes only and does not constitute professional tax advice, consultation, or representation. The author and publisher are not responsible for any errors or omissions, or for any actions taken based on the information contained in this blog.