Key takeaways
- A UAE company needs audited financial statements for corporate tax if it is a Taxable Person outside a Tax Group with revenue above AED 50 million in the Tax Period, or if it is a Qualifying Free Zone Person (QFZP) at any revenue level.
- A Qualifying Free Zone Person must prepare and maintain audited financial statements even if its revenue is only AED 2 million, because the rule for QFZPs has no revenue floor.
- A Tax Group must prepare audited special purpose financial statements, following the form and rules the FTA sets.
- A company below the AED 50 million line that is not a QFZP has no corporate tax audit requirement, though it must still keep proper financial statements and records for seven years.
- The rule comes from Article 54 of Federal Decree-Law No. 47 of 2022 and Ministerial Decision No. 84 of 2025, which applies to Tax Periods starting on or after 1 January 2025.
- A free zone authority, bank or investor can require an audit that corporate tax does not, so check the free zone's own rules separately.
Who has to prepare audited financial statements for UAE corporate tax?
Three groups must have audited financial statements: Taxable Persons that are not in a Tax Group and have revenue above AED 50 million, every Qualifying Free Zone Person, and Tax Groups (on a special purpose basis). The rule sits in Article 2 of Ministerial Decision No. 84 of 2025, issued under Article 54(2) of the Corporate Tax Law.
| Who you are | Audit required for corporate tax? | Basis |
|---|---|---|
| Taxable Person, not in a Tax Group, revenue above AED 50 million in the Tax Period | Yes | Ministerial Decision No. 84 of 2025, Article 2(1) |
| Qualifying Free Zone Person, any revenue | Yes | Ministerial Decision No. 84 of 2025, Article 2(1) |
| Tax Group | Yes, audited special purpose financial statements | Ministerial Decision No. 84 of 2025, Article 2(2) |
| Non-resident Person with a UAE permanent establishment or nexus | Yes if UAE-sourced revenue (permanent establishment or nexus) is above AED 50 million | Ministerial Decision No. 84 of 2025, Article 2(4) |
| Taxable Person below AED 50 million, not a QFZP | No corporate tax audit requirement | Ministerial Decision No. 84 of 2025 |
Figures as of 31 October 2026. The decision was issued on 25 March 2025 and repeals Ministerial Decision No. 82 of 2023 for Tax Periods starting on or after 1 January 2025; the older decision still governs Tax Periods that began earlier.
AED 50 million: the revenue level above which a Taxable Person outside a Tax Group must have audited financial statements for corporate tax. Source: Ministerial Decision No. 84 of 2025, Article 2(1), published by the Ministry of Finance, checked 31 October 2026.
Does a free zone company need an audit for corporate tax?
A free zone company needs an audit for corporate tax if it is a Qualifying Free Zone Person, and that applies whatever its revenue is. A free zone company that is not a QFZP follows the same AED 50 million test as a mainland company.
Say a SHAMS consulting company bills AED 1.5 million a year and meets the QFZP conditions: it still needs audited accounts. Without QFZP status and below AED 50 million, it would not.
Separately, free zone authorities can set their own audit or financial reporting rules, which may apply to licence renewal whatever the corporate tax position is. SHAMS itself points founders to their specific free zone rules on this. Check your free zone's current requirement with the authority directly.
How is the AED 50 million revenue test applied?
The AED 50 million test is applied to revenue in the relevant Tax Period, and the FTA's accounting standards guide says the threshold is not pro-rated for a short or long Tax Period.
For a non-resident Person, only revenue earned through a UAE permanent establishment or nexus counts toward the test. For a Tax Group, the requirement is audited special purpose financial statements, and the FTA sets the form and procedures. That guide predates Ministerial Decision No. 84 of 2025, so confirm the point with current FTA guidance for a short period.
Who can sign the audit, and what has to be in the tax return?
The audit must be done by an auditor registered in the UAE under Federal Law No. 12 of 2014 and Ministerial Resolution No. 403 of 2015, according to the FTA's accounting standards guide.
The financial statements go into the corporate tax return itself. Summaries of the FTA's Tax Returns Guide say the return is completed on EmaraTax and asks for the audit details where the statements are audited, including the auditor's name and the audit opinion. Filing is due within nine months of the end of the Tax Period, so a 31 December 2026 year end gives a deadline of 30 September 2027.
Which accounting standard and basis do the financial statements need?
Corporate tax figures must be built on IFRS, or IFRS for SMEs if revenue does not exceed AED 50 million in the Tax Period (Ministerial Decision No. 114 of 2023, Article 4).
| Item | Rule | Source |
|---|---|---|
| Default standard | IFRS | Ministerial Decision No. 114 of 2023, Article 4(1) |
| IFRS for SMEs | Allowed only if revenue does not exceed AED 50 million in the Tax Period | Ministerial Decision No. 114 of 2023, Article 4(2) |
| Cash basis | Allowed if revenue does not exceed AED 3 million in the Tax Period; above that, accrual unless the FTA approves | Ministerial Decision No. 114 of 2023, Article 2 |
Figures as of 31 October 2026.
If you'd rather not track the audit, filing and renewal dates by hand, the free UAE compliance calendar lists them for your company.
What are the penalties if I skip the audit or the records?
The penalty schedule in Cabinet Decision No. 75 of 2023 has no line item that fines a missing audit by name, but it does fine missing records and late returns, and a missing audit usually shows up through those routes. The FTA's guide also says using the wrong accounting standard can be penalised under Article 24(1)(a) of the Tax Procedures Law.
| Violation | Penalty | Source |
|---|---|---|
| Failure to keep required records | AED 10,000; AED 20,000 if repeated within 24 months | Cabinet Decision No. 75 of 2023, item 1 |
| Late tax return, first 12 months | AED 500 for each month or part of a month | Cabinet Decision No. 75 of 2023, item 7 |
| Late tax return, from month 13 | AED 1,000 for each month or part of a month | Cabinet Decision No. 75 of 2023, item 7 |
Amounts as of 31 October 2026. Records must be kept for at least seven years after the end of the Tax Period they relate to (FTA, 28 August 2025).
What most guides don't tell you
- Revenue is tested per Tax Period, not on a rolling basis. A company that crosses AED 50 million in one year owes an audit for that Tax Period, so the auditor needs booking before the return deadline of nine months after year end.
- QFZP status does not remove the audit; the audit is part of it. A free zone company that skips the audit to save fees risks having to defend its 0% position on qualifying income, with nothing audited to point to.
- Your bookkeeping decides your audit fee. Auditors price on how clean the ledgers, bank reconciliations and fixed asset records are. Messy ledgers mean clean-up work before the audit can start; this follows from how audits work, not from a published figure.
- The bank may ask for what the FTA doesn't. A company below AED 50 million with no QFZP status has no corporate tax audit requirement, but lenders and investors often want audited statements anyway.
Which deadlines apply to your company?
Audit, return, VAT and licence dates differ by free zone, year end and revenue. The free UAE compliance calendar is a free calendar of your company's UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Frequently asked questions
Which companies need audited accounts for corporate tax purposes?
Taxable Persons outside a Tax Group with revenue above AED 50 million in the Tax Period, all Qualifying Free Zone Persons regardless of revenue, and Tax Groups (which prepare audited special purpose financial statements). Everyone else is not required to have an audit for corporate tax, though a bank, investor or free zone may still ask for one.
What accounting standard do I need to use for corporate tax?
Taxable Persons must use IFRS. IFRS for SMEs is allowed only if revenue does not exceed AED 50 million in the Tax Period (Ministerial Decision No. 114 of 2023, Article 4).
Can I use cash basis accounting for corporate tax?
Yes, if revenue does not exceed AED 3 million in the Tax Period; no application to the FTA is needed below that level. Above AED 3 million you move to the accrual basis unless the FTA approves continued use in exceptional circumstances (Ministerial Decision No. 114 of 2023, Article 2).
What records do I need to keep for corporate tax and for how long?
You must keep the records that support your tax return, including transactions, assets, liabilities and your financial statements, for at least seven years after the end of the Tax Period they relate to. The FTA can fine you AED 10,000 for failing to keep required records, rising to AED 20,000 if it happens again within 24 months.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- Ministerial Decision No. 84 of 2025 on Audited Financial Statements (Ministry of Finance)
- FTA Corporate Tax Guide: Accounting Standards and Interaction with Corporate Tax (covers Ministerial Decision No. 114 of 2023)
- FTA press release on record keeping and filing, 28 August 2025
- Cabinet Decision No. 75 of 2023 on administrative penalties (Ministry of Finance)
- FTA Corporate Tax Guide: Tax Returns (as summarised by PwC Middle East)
- SHAMS free zone: audit requirements for free zone companies
Last checked: 31 October 2026
This is general information, not tax or legal advice for your specific situation.