Introduction
The Ministry of Finance in the United Arab Emirates ("UAE") has introduced Ministerial Decision No. 82 of 2023 on the Determination of Categories of Taxable Persons Required to Prepare and Maintain Audited Financial Statements ("Ministerial Decision No. 82 of 2023") for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses ("Corporate Tax Law").
This blog post will provide an overview of the Ministerial Decision regarding the determination of Categories of taxable persons required to prepare and maintain audited financial statements for the purposes of the UAE Corporate Tax Law for businesses operating in the UAE.
Article (2) of Ministerial Decision No. 82 of 2023 states that the following categories of taxable persons are required to prepare and maintain audited financial statements:
- Taxable persons with revenue exceeding AED 50 million during the relevant tax period.
- Qualifying Free Zone Persons
Taxable Persons with Gross Revenue Exceeding AED 50 Million
Any taxable person deriving gross revenue exceeding AED 50 million during the relevant tax period must prepare and maintain audited financial statements. This requirement ensures that businesses with high revenue are held accountable for their financial records and adhere to the corporate tax law in the UAE.
Qualifying Free Zone Persons
Qualifying Free Zone Persons are also required to prepare and maintain audited financial statements.
A Qualifying Free Zone Person refers to a business within one of the designated free zones in the UAE and that satisfies certain conditions to qualify as a free zone person under the Corporate Tax Law.
Implications for Businesses
The introduction of Ministerial Decision No. 82 of 2023 has significant implications for businesses operating in the UAE. It is essential for companies to assess their financial standing and determine if they fall under one of the categories mentioned above.
If you are required to prepare and maintain audited financial statements, HSBM Global can assist with your accounting, auditing and tax needs to ensure compliance with the new legislation.
Failure to comply with the requirements of the Ministerial Decision No. 28 of 2023 may result in penalties and fines. It is crucial for businesses to remain up-to-date with the latest tax laws and regulations to avoid any potential issues or complications.
Conclusion
Businesses must understand the new requirements and ensure they are prepared to prepare and maintain audited financial statements if they fall within the specified categories.
HSBM Global is here to help you navigate the evolving tax landscape in UAE and provide expert accounting and tax services to ensure your business remains compliant with the latest developments. Email us at tax@hsbmglobal.com for assistance.