For UAE corporate tax, a Qualifying Free Zone Person must prepare and keep audited financial statements whatever its revenue. For other taxable persons, AED 50 million of revenue is the line: above it, audited statements are required; at or below it, the business may apply IFRS for SMEs.
Facts checked: 16 October 2026 against the Federal Tax Authority's corporate tax guides, through a search summary; we did not read the full guide. Some other UAE laws may also require an audit, which we have not covered. This is general information, not advice.
The two lines
| Who | Requirement under the corporate tax law |
|---|---|
| Qualifying Free Zone Person | Audited financial statements, regardless of revenue |
| Other taxable person, revenue above AED 50 million | Audited financial statements |
| Other taxable person, revenue AED 50 million or less | May apply IFRS for SMEs |
Do not mix these up with the AED 3 million figure. That is the limit for Small Business Relief, not for audit. See UAE corporate tax rates and relief.
What IFRS for SMEs means for a small business
IFRS for SMEs is a simplified set of accounting standards for smaller businesses. A business at or below AED 50 million can choose it instead of full IFRS. It reduces disclosure, but it does not remove the need for sound books and a proper close.
How to get ready for an audit
An audit goes faster, and costs less, when the file is ready. Before the auditor arrives:
- Close the books fully. Cut-off, accruals, prepayments and provisions.
- Reconcile every bank account, debtor and creditor balance, and fixed asset register to its ledger.
- Tie the books to the VAT returns and, where relevant, e-invoice records.
- Prepare the statements and notes in the chosen standard, with comparatives.
- Keep a file for every material balance: the reconciliation, the confirmation, the working.
- Document related-party transactions and any unusual entries before you are asked.
- Agree the timetable with the auditor early, so the audit is not squeezed into the tax return deadline.
Frequently Asked Questions
Does every UAE company need an audit?
Not under the corporate tax law alone. It requires audited statements from Qualifying Free Zone Persons and from taxable persons above AED 50 million of revenue. Other laws, such as free zone rules, may add requirements.
What is the AED 50 million figure for?
It is the revenue line for audited statements and for the choice of IFRS for SMEs under the corporate tax law, as we understand the FTA guide.
Can a small business use IFRS for SMEs?
A business with revenue at or below AED 50 million may apply it, according to the FTA guide.
Related Articles
Statutory facts on this page are checked against their sources, and the page says where it relied on secondary reporting. How we verify · Report an error