UAE CT: Do All Taxable Persons Need to Have Audited Books of Accounts?
With the UAE Corporate Tax (CT) regulations continually advancing and evolving, many businesses are left wondering: do we all need audited books of accounts for each taxable period? What are the requirements? Are there any thresholds? For small and medium companies, this question creates real stress. They worry about extra costs, more paperwork, and penalties for missing a requirement they don’t fully understand.
The confusion often arises because tax compliance rules differ depending on the type and size of the business. The good news is that not every taxable person in the UAE is required to have audited financial statements. The Ministry of Finance has issued clear rules that define who must comply. Let’s break them down in simple terms.
JCA (Jitendra Chartered Accountants) provides comprehensive corporate tax services, under its brand Tax Gian, with the expertise of professional corporate tax agents in the UAE.
Who Must Have Audited Financial Statements?
- Businesses with Revenue Above AED 50 Million
If your company makes revenue of more than AED 50 million during a tax period, you have to prepare and retain audited financial statements. If your revenue is below this mark, then there’s no need of audit. This threshold is acquired to minimise the burden on small and medium-sized enterprises (SMEs).
By keeping the limit high, the UAE allows smaller businesses to manage their own accounting records without being forced to go through the audit process each year.
- Qualifying Free Zone Persons (QFZPs)
The second group that must have audited financial statements are Qualifying Free Zone Persons. These entities enjoy a 0% corporate tax rate on qualifying income, but to keep that benefit, they must comply strictly with audit requirements.
Even if their revenue is below AED 50 million, QFZPs still need to maintain audited financial statements. This helps them prove their eligibility for the 0% tax rate and ensures transparency with the Federal Tax Authority (FTA). If you are a QFZP, get help from our corporate tax agents in Dubai for audit compliance.
Other Situations Where Audited Accounts Are Required
Beyond the Corporate Tax Law, some businesses must have their accounts audited due to other regulatory requirements in the UAE. Examples include:
- Free Zone Authority Regulations– Many free zones require audited accounts for license renewals.
- Banks– Companies with loans or credit facilities must often provide audited financials.
- Insurance Brokers and Exchange Houses– The Central Bank of the UAE (CBUAE) makes this mandatory.
- Hotels and Tourism Businesses– The Department of Economy and Tourism (DET) may require them.
- Investor Relations– Startups and growing businesses often choose audits voluntarily to attract investors or buyers.
Even if the law does not demand it, having audited accounts builds credibility. It shows financial transparency and helps prevent fraud within the organisation.
Who Doesn’t Need Audited Financial Statements?
Not every taxable person falls into the mandatory audit category. If your business revenue is below AED 50 million and you are not a Qualifying Free Zone Person, you can submit unaudited financial statements with your corporate tax return.
However, this does not mean you can ignore proper recordkeeping. Every taxable person must still:
- Maintain accurate accounting records and supporting documents for at least seven years after the end of each tax period.
- Prepare financial statements according to International Financial Reporting Standards (IFRS) or IFRS for SMEs.
- Be ready to show these records to the Federal Tax Authority (FTA) if requested.
Even smaller companies that are not required to audit should ensure their records are well-organised and transparent. It reduces risk during tax assessments and helps avoid penalties.
Audit and Tax Periods
A taxable person’s tax period is usually the company’s financial year, either the Gregorian calendar year or a 12-month accounting period.
If a business needs to change its tax period, for example, due to liquidation, financial alignment, or restructuring, it must apply to the FTA within six months after the end of the original period. Once approved, the company can either extend the period to a maximum of 18 months or shorten it to a minimum of 6 months.
Corporate Tax Registration and Filing
Every taxable person must register electronically for corporate tax and obtain a Corporate Tax Registration Number (CT TRN), which is different from the VAT TRN. Businesses can register anytime with the help of our corporate tax agents in Dubai.
Each business only needs to file one corporate tax return per tax period, and this must be done within nine months after the end of the financial year. The tax payment is also due within this same timeline.
How Does the Audit Help Businesses?
Here’s why many UAE companies still choose to get audited:
- It builds trust with banks, investors, and regulators.
- It helps detect internal errors or possible fraud.
- It ensures accuracy in tax filings and avoids costly compliance issues.
- It strengthens business reputation and financial discipline.
How can Jitendra Chartered Accountants (JCA) help?
Not all taxable persons in the UAE must have audited books of accounts. The rule mainly applies to companies earning above AED 50 million, Qualifying Free Zone Persons and some others. If you fall under any of the above categories for the new tax period, make sure you get in touch with our UAE corporate tax agents and auditors. They will help you maintain proper records, comply with requirements, and lead you to a successful audit at the end of the tax period.