Updated Ministerial Decision on Audited Financial Statements

The ministry has released a revised ministerial decision requiring the preparation and maintenance of audited financial statements by taxpayers to comply with the UAE Corporate Tax Law. The decision takes the place of the previous Ministerial Decision No. 82 of 2023, which will remain in effect for fiscal years that start before January 1, 2025. With the new decision, all tax groups will prepare audited financial statements (FS). This eliminates the need to prepare an audited FS only in cases where the tax group's consolidated revenue exceeded AED 50 million. Since taxpayers encountered real-world difficulties in putting the prior requirements into practice, more guidance on preparing these FS will be released. The ruling also implies that Qualifying Free Zone Persons (QFZP) involved in distribution operations might be subject to extra guidelines. If they earn greater than AED 50 million or claim QFZP benefits, taxpayers (who are not members of a tax group) are still required to maintain various kinds of audited financial statements. According to the ruling, only income earned by a non-resident person's permanent establishments and/or nexus in the United Arab Emirates will be considered when determining the revenue threshold (AED 50 million).