UAE corporate tax rules widen audit duty ahead of FY2026 year-end

ByBNW Staff

UAE companies that close their books on 31 December 2026 face the second filing cycle under the expanded corporate tax audit rules. For many, the audited statements behind that filing are now a legal requirement, not an option.

Article 54 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses allows the Minister of Finance to require audited financial statements. Ministerial Decision No. 84 of 2025 sets out who must prepare them. There are three groups:

  • Taxable persons with revenue above AED 50 million in the tax period.
  • Qualifying Free Zone Persons claiming the 0% rate, at any revenue level.
  • Every tax group, with no revenue threshold.

Tax groups must prepare audited special purpose aggregated financial statements for tax periods starting on or after 1 January 2025. FTA Decision No. 7 of 2025 governs how these statements are prepared. Before this change, a group below the revenue threshold could file without an audit.

Statements must follow IFRS. Under Ministerial Decision No. 114 of 2023, businesses with revenue of AED 50 million or less may use IFRS for SMEs.

Federal Law No. 12 of 2014 on the Regulation of the Auditing Profession means only auditors registered with the Ministry of Economy can sign these statements. Free zone companies have a second requirement. Their auditor must also be accepted by the free zone authority, and many free zones link licence renewal to audited accounts on their own deadlines.

Under Article 53 of the corporate tax law, the return is due nine months after the end of the tax period. For a 31 December 2026 year-end, that is 30 September 2027. Article 56 requires records to be kept for seven years after the tax period ends.

Tax audit timing has also changed. Amendments to the Tax Procedures Law set new five-year limits on audits and refunds and strengthen FTA powers from January 2026. Records supporting a return can now be reviewed well after it is filed.

These rules overlap. One company can need the same accounts audited for its corporate tax return, its free zone licence and its banks, each with its own timeline. The first cycle showed that the delay rarely comes from the audit itself. It comes from late closings, unreconciled bank and VAT records, and auditors appointed in the final quarter.

“Companies should treat the annual audit as part of the year, not the last step before filing. Fixing the timeline in October is easier than repairing records in March,” said Farahat & Co., a Dubai firm of Ministry of Economy approved auditors that has audited UAE mainland and free zone companies since 1985.