UAE Ministerial Decision No. 84 of 2025 – Key Highlights & Impact

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By Serendib Consultancy

July 2025

Legal

The UAE Ministry of Finance has issued Ministerial Decision No. 84 of 2025, replacing Decision No. 82 of 2023. It introduces more stringent financial reporting and audit obligations under the UAE Corporate Tax regime for tax periods starting on or after January 1, 2025.

This move aligns with international standards and elevates transparency across businesses operating within the UAE.

Key Provisions of Ministerial Decision No. 84 of 2025

1. Mandatory Audited Financial Statements

  • Taxable Persons (not in Tax Groups): Audit required if annual revenue exceeds AED 50M.
  • Qualifying Free Zone Persons (QFZPs): Audit required for all, regardless of revenue.
  • Tax Groups: Must prepare audited special purpose financials, with no revenue threshold.

2. IFRS Compliance

Under Ministerial Decision No. 114 of 2023:

  • All statements must comply with IFRS.
  • Businesses under AED 50M may use IFRS for SMEs.
  • Cash accounting is allowed only if revenue ≤ AED 3M or with special FTA approval.

3. Audit Scope Expanded

  • Removes audit thresholds for Tax Groups and QFZPs.
  • Leads to broader application of statutory audits across sectors.

4. Stricter Record Retention

  • Maintain all financial documents for at least 7 years.
  • Must be accessible to the Federal Tax Authority (FTA) upon request.

5. New Free Zone Distributor Obligations

  • Additional FTA procedures to apply for QFZPs in goods/materials distribution in or from a Designated Zone.

6. Clarified Thresholds for Non-Residents

  • AED 50M audit rule applies only to UAE-sourced income via a Permanent Establishment or nexus.

7. Tax Compliance and Strategic Impact

  • Audited financials now directly influence Corporate Tax calculations and QFZP eligibility.
  • Businesses must treat audits as core compliance and tax planning tools.

🚨 What’s Still Pending?

As of July 2, 2025, the FTA has yet to release detailed procedural guidance for:

  • Special purpose financials for Tax Groups
  • Distribution-specific requirements for Free Zone businesses

Firms are advised to monitor FTA announcements and proactively engage tax advisors.

Frequently Asked Questions

What is Ministerial Decision No. 84 of 2025?
It’s a UAE regulation that mandates stricter financial reporting and audit requirements for taxable entities under the new Corporate Tax regime, effective from January 1, 2025.
Who must now prepare audited financial statements?
All QFZPs, Tax Groups (regardless of revenue), and individual Taxable Persons with over AED 50M in annual revenue.
Are companies required to use IFRS?
Yes. Full IFRS is mandatory. Businesses with under AED 50M revenue may apply IFRS for SMEs. Cash accounting is allowed only below AED 3M revenue or with FTA approval.
How long must companies retain financial records?
A minimum of 7 years, and they must be readily available to the Federal Tax Authority.
What happens if a business fails to comply?
Non-compliance can affect tax calculations, QFZP status, and may lead to penalties from the FTA.
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