The UAE Ministry of Finance has declared that the corporate tax system in the nation requires taxable people with yearly revenues of Dh50 million or more to maintain audited financial accounts.

This requirement also applies to qualifying free zone persons (QFZPs), who are subject to a 0% tax rate on their qualifying income. QFZPs are not exempt from maintaining audited financial statements, regardless of their gross revenue or net profits, to prevent tax evasion. Companies operating in free zones should evaluate the tax benefits of being a QFZP and consider relocating their operations into a free zone to maintain their 0% tax rate.

Also, non-resident individuals who may unexpectedly end up staying in the country will also be subject to new regulations under Ministerial Decision No. 83 of 2023. This decision aims to prevent tax avoidance and double non-taxation, in line with global best practices, by providing clarity on what constitutes temporary and exceptional circumstances for non-residents.

The Undersecretary of the Ministry of Finance, Younis Haji Al Khouri, believes that these decisions will increase transparency, simplicity, and clarity in the UAE’s corporate tax system, reduce the risk of tax avoidance, and create a fair and well-regulated tax environment for all.