Tax & compliance
Who actually needs an audit
Not every UAE company needs one, and the companies that do often do not realise it. A qualifying free zone position is conditional on audited accounts, which makes the audit part of the tax planning.
The rule
What the law actually requires.
There is no single UAE-wide audit requirement applying to every company. The obligation arises from three separate directions. Many free zones require audited financial statements as a condition of licence renewal, and the requirement varies from zone to zone. Mainland companies of certain legal forms and sizes are required to have their accounts audited under the companies law. And corporate tax imposes its own requirement: audited financial statements are a condition of Qualifying Free Zone Person status, and are required of taxable persons above a revenue threshold.
The corporate tax link is the one that changed the calculation. A free zone company relying on the 0% qualifying rate cannot sustain that position without audited accounts, which means the audit is no longer an administrative cost of renewal but a condition of the tax treatment. Companies that historically obtained a minimal audit to satisfy a zone's renewal checklist now need one that will support a tax position, and those are not the same engagement. The distinction matters if the FTA ever examines the qualifying claim.
Thresholds and deadlines
- No universal rule
- The obligation comes from the zone, the companies law, or tax
- Free zones
- Many require audited accounts at renewal — check yours
- Mainland
- Certain legal forms and sizes under the companies law
- QFZP
- Audited financial statements are a condition of the 0% rate
- Threshold
- Taxable persons above a revenue threshold must have audited accounts
- Auditor
- Must be registered and, in free zones, often approved by that zone
The compliance calendar
What to do
The filing, step by step.
- Check your free zone's renewal requirementIt varies between authorities and is often buried in the renewal checklist rather than announced.
- Check whether you rely on a qualifying positionIf you claim the 0% free zone rate, audited accounts are a condition of it.
- Use an auditor approved by your zoneSeveral authorities maintain approved lists, and accounts from an unapproved firm are rejected at renewal.
- Scope the engagement for the tax positionAn audit to satisfy a renewal checklist is not necessarily one that supports a qualifying claim.
- Start early enoughAudit season here is congested, and a late audit delays both the renewal and the tax return.
Related
Questions
No. The requirement comes from the free zone's rules, the companies law for certain mainland forms, or from corporate tax — not from a single universal rule.
Many zones require them at renewal, and any company relying on Qualifying Free Zone Person status needs them as a condition of the 0% rate.
The auditor must be registered, and many free zones maintain approved lists. Accounts from an unapproved firm can be rejected.
After the year end and well before both the licence renewal and the corporate tax return deadline. Audit capacity here is seasonal.
One question
How are the books actually kept?
Then the question is whether the audit is scoped for what it is now carrying. If you rely on a qualifying free zone position, the audited accounts are a condition of the 0% rate rather than a renewal formality — and that is a different engagement.
What the audit has to supportOr just ask usThat was sufficient when there was no tax. Taxable income is now computed from accounting profit under IFRS, so the work has to happen anyway — and reconstructing two years after the fact costs more and produces worse numbers than doing it monthly.
What is actually requiredOr just ask usThen start before the year end rather than at the filing deadline. The return cannot be prepared without accounts, audit capacity here is seasonal, and a late audit delays the licence renewal as well as the tax return.
Getting the year end rightOr just ask us