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:
- 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.
- 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.
What can Excellence do to help?
Excellence has a team of dedicated Qualified Chartered Accountants who will prepare and maintain your company’s proper book of accounts,
Provide audited financial statements for your company,
Provide professional financial advisory services suited for your company’s requirements, And ensure timely assistance for any concerns and better coordination with the help of our Client Service Team.
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Read MoreIn a digital-first economic landscape, countries with a first-mover advantage are rapidly becoming global innovation hubs. The UAE’s implementation for mandatory e-invoicing is one of the steps in that direction. In a bid to help businesses prepare better, the Federal Tax Authority recently announced the extension to the deadline for appointing an Accredited Service Provider (ASP) from 1st July to 30th October, 2026. This extension will enable businesses that are still assessing the regulatory requirements to lay the
necessary groundwork before implementing the system in their operations, while ensuring all compliance obligations are met. While offering flexibility, this also presents an opportunity for owners to closely monitor the systems and controls before the mandatory rollout comes into effect. E-invoicing is steadily reshaping how enterprises operate in the UAE, moving invoicing beyond PDFs, scans, and email-based exchanges.
Under the new framework, invoices will now be generated in XML format, enabling standardised data exchange and direct reporting to the FTA.
The new framework will do more than just improve efficiency and transparency with a seamless exchange of invoicing data, but etch a new chapter in how compliance will look in a digital tax ecosystem.
In a digital-first economic landscape, countries with a first-mover advantage are rapidly becoming global innovation hubs. The UAE’s implementation for mandatory e-invoicing is one of the steps in that direction. In a bid to help businesses prepare better, the Federal Tax Authority recently announced the extension to the deadline for appointing an Accredited Service Provider (ASP) from 1st July to 30th October, 2026. This extension will enable businesses that are still assessing the regulatory requirements to lay the necessary groundwork before implementing the system in their operations, while ensuring all compliance obligations are met. While offering flexibility, this also presents an opportunity for owners to closely monitor the systems and controls before the mandatory rollout comes into effect. E-invoicing is steadily reshaping how enterprises operate in the UAE, moving invoicing beyond PDFs, scans, and email-based exchanges.
Under the new framework, invoices will now be generated in XML format, enabling standardised data exchange and direct reporting to the FTA.
The new framework will do more than just improve efficiency and transparency with a seamless exchange of invoicing data, but etch a new chapter in how compliance will look in a digital tax ecosystem.
E-Invoicing in the UAE
Why This Extension Matters
With the mandatory rollout to come into force from January 2027, the extension does not alter the UAE’s broader e-invoicing timeline. The initial rollout will see businesses generating annual revenues above AED 50 million, leading the transition with smaller enterprises gradually brought in through subsequent phases.
This preparation window showcases the consideration and planning that is required ahead of the rollout. As the system pivots towards e-invoicing, it becomes more than just the exchange of data. It comes down to how businesses manage the data, the reporting process in place, and if they are in sync with the compliance requirements.
Enterprises in Dubai and other emirates are turning their attention towards the quality of the invoice data while ensuring consistency and the ability of the existing systems to support machine-readable invoices.
Another key challenge for organisations that are operating across multiple entities or invoicing platforms will be integration and standardisation. This is where having the right ASP matters. With the implementation timeline moving closer, the demand for the ASP is anticipated to see an increase.
The revised deadline will help businesses get more time to make early planning and conduct accurate evaluation.
Accredited Service Providers
A Key Component of the E-Invoicing Framework
The announcement brings the role of the accredited service providers within the UAE’s e-invoicing ecosystem into the spotlight. With businesses transitioning to incorporate accounting and ERP systems into their operations to generate invoices, the ASP will become the linchpin between them and the regulatory authorities.
ASPs will now not only have to facilitate the exchange of the data but also ensure a standardised structure for invoicing across the UAE’s e-invoicing ecosystem. The support by the ASP will enable ease in compliance and meeting the technical requirements.
The extension also gives significant time for businesses to assess and align an ASP that meets their operational requirements. While for many organisations, this also presents an opportunity to take a closer look at their integrations and carefully understand the ability of the provider to support their existing accounting and ERP systems.
UAE E-Invoicing Penalties
Why Early Preparation Matters
The extension provides additional time for businesses to implement the necessary requirements. But for companies that are still on the fence, this becomes a final call as failure to comply with the requirements and the UAE’s e-invoicing framework may result in financial penalties, including AED 5,000 per month for implementation delays and AED 100 per invoice for non-transmission.
Final Words
The announcement of the extension reflects the UAE’s level-headed approach and pragmatism in establishing the e-invoicing framework as a stepping stone in its broader tax strategy. With countries like Saudi Arabia and India reaping the benefits of their respective e-invoicing systems, the UAE’s phased approach ensures that businesses are equipped with the right tools to ensure a streamlined transition.
The shift towards e-invoicing is a nod to the future, where the tax landscape will see the information travel faster and compliance becoming embedded in critical operations. The new framework is expected to see businesses generate standardised invoices that will drive the new reporting ecosystem forward.