Ministerial Decision No. 82 of 2023: Specifying the categories

Ministerial Decision No. 82 of 2023: Specifying the categories of Taxable Person required to Maintain Audited Financial Statements.

Introduction:

The Ministerial Decision No. 82 of 2023 which is issued by the Ministry of state for Financial Affairs, specifies the categories of taxable person who is required to prepare and maintain the audited financial statements for the purpose of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. This decision is aiming to enhance transparency and compliance with the financial reporting, which clarifies that Ministerial Decision No.82 of 2023, is same as the Federal Decree Law No.42 of 2022, which is Corporate Tax Law.

The main focus of the Ministerial Decision No. 82 of 2023 is to understand the categories of a taxable person who must prepare and maintain the audited financial statements. These statements are subject to special consideration by relevant authorities to ensure accuracy and compliance. The following are the categories of taxable person who are obliged to the requirements:

1. Taxable person with the revenue exceeding AED 50 million (50,000,000), during the relevant tax period are obliged to prepare and maintain the audited financial statements. This ensures transparency of the entities with significant financial activities.
2. The Free zone Persons are also the qualifying entities who are required to prepare and maintain the audited financial statements. The Free Zones entities also meet the same financial reporting standards same as those which are outside the free zones. This ensures uniformity and consistency in the financial reporting of all the entities.

What needs to be done?

• Maintaining Audited Financial Statements is important for Qualifying Free Zone Persons, to obtain benefit of 0% tax on Qualifying Income.
• Qualifying Free Zone Persons (QFZP) are required to maintain audited financial statements irrespective of their gross revenue or net profits.
• It’s Advisable to maintain financial statement, even if audit is not applicable, as Financial Statement will act as a basis for tax return filing.

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