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Corporate Tax

Who Must Prepare and Maintain Audited Financial Statements Under UAE Corporate Tax Regulations?

Ministerial Decision No. 82 of 2023 requires taxable persons to prepare and maintain audited financial statements that comply with the International Financial Reporting Standards (IFRS) for tax purposes. To ensure accurate reporting of profits and proper payment of tax, the Federal Tax Authority compels certain UAE taxable persons to submit their audited financial statements along with their tax returns. To effectively prepare and maintain audited financial statements and to stay compliant, it is advisable for taxable persons to seek the services of Corporate Tax UAE.  

Categories of Taxable Persons Required to Prepare Audited Financial Statements

In accordance with the Ministerial Decision No. 82 of 2023, the following categories of taxable persons are required to prepare and maintain their audited financial statements;

  1. Businesses that fall under the scope of corporate tax law and within a single tax period exceed the 50,000,000 AED revenue threshold.
  2. Businesses that are qualified free zone persons.

Consolidated financial statements are required for companies that are part of a group structure. Corporate Tax Advisors assist taxable persons to prepare for tax implementation in compliance with statutory tax regulations and standards.  

Read more: Will all entities that are subject to corporation tax be required to have audited Financial Statements?

Penalties for Noncompliance

Failure to prepare and maintaing audited financial statements can result in severe penalties, The Federal Tax Authority (FTA) may impose a penalty of up to AED 50,000 for failure to maintain adequate records, including audited financial statements, for the required period. In addition to legal action, companies may face suspension of their trade license for noncompliance. 

Key Considerations for Ensuring Compliance

To ensure compliance with UAE corporate tax law, taxable persons should take certain key considerations into account. These include identifying whether they fall under any of the categories of companies required to prepare audited financial statements, engaging a qualified auditor to perform the audit and issue necessary reports, maintaining adequate records for the required period, and submitting the audited financial statements to the relevant authorities within the prescribed time frame.

 To add on, taxable persons should stay updated on any changes to the UAE tax law and regulations to avoid noncompliance and potential penalties. Therefore, ensuring compliance with UAE corporate tax regulations and standards is imperative for taxable persons to avert penalties. This can be achieved by understanding the requirements for audited financial statements, engaging qualified auditors, maintaining adequate tax and financial records, and staying up to date with changes to the UAE corporate tax law. 

Choose Corporate Tax UAE to Avail the Best Tax Services

Essentially, it is advisable for taxable persons to avail of the services of Corporate tax consultants UAE to effectively prepare for tax implementation and to stay compliant. Therefore, to avail the best corporate tax services in UAE, contact us today and we shall be glad to assist you.