The UAE Ministry of Finance has issued an updated Ministerial Decision designed to enhance transparency and ensure high standards of financial reporting for businesses operating under the country’s Corporate Tax Law, Federal Decree-Law No. 47 of 2022. The new directive aims to bring clarity to the preparation and maintenance of audited financial statements, reinforcing the UAE’s ongoing commitment to global tax compliance.
Tax Groups Must Prepare Special Purpose Aggregated Financial Statements
Under the updated rules, all tax groups will be required to prepare audited special purpose aggregated financial statements for Corporate Tax purposes. This requirement is intended to improve consistency in reporting across tax groups, without imposing additional administrative burdens on individual entities. In line with the UAE’s efforts to maintain a business-friendly environment, the underlying members of each tax group will not be required to prepare audited stand-alone financial statements. The Federal Tax Authority (FTA) will provide further guidance on the specific framework for these aggregated financial statements in due course.
Clarifications for Free Zone Distributors Also Announced
The new decision also outlines upcoming clarifications for Qualifying Free Zone Persons that are engaged in distributing goods or materials within or from a Designated Zone. The FTA is expected to issue additional guidance to ensure such businesses can confidently align with the Corporate Tax Free Zone regime and continue to benefit from its provisions without ambiguity.
This move marks another step by the UAE to balance tax compliance with business competitiveness, offering clear reporting pathways while reinforcing its status as a global hub for commerce and investment.
