UAE Tightens Corporate Tax Framework with Key Updates on Audited Financials and Global Minimum Tax Rules

As part of its continued efforts to enhance transparency and align with international tax standards, the UAE Ministry of Finance has announced two significant developments that directly impact corporate compliance and multinational group structuring in the country. Here’s what businesses need to know.

Ministerial Decision No. 84 of 2025 – Mandatory Audited Financial Statements for Tax Groups

In April 2025, the Ministry issued Ministerial Decision No. 84 of 2025, amending the earlier Decision No. 82 of 2023 concerning audited financial statements under the UAE Corporate Tax Law (Federal Decree-Law No. 47 of 2022). This marks a pivotal shift in reporting obligations, especially for tax groups.

Key Changes Introduced:

• Audited Aggregated Financial Statements Now Mandatory for All Tax Groups
• Regardless of annual revenue, all tax groups are now required to prepare and submit audited special purpose aggregated financial statements for corporate tax filing purposes. This move standardizes reporting and removes the prior exemption that applied to groups with revenues below AED 50 million.
• Relief from Stand-Alone Audits Within Groups
• Entities forming part of a tax group are no longer required to maintain separate audited financial statements, streamlining the compliance process and reducing duplication of audit efforts.
• Unchanged Requirements for Non-Group Entities
• Entities not part of a tax group must continue to prepare audited financials if their annual revenue exceeds AED 50 million or if they claim Qualifying Free Zone Person (QFZP) status.
• Clarification for Non-Residents
• Non-resident juridical persons are required to consider only UAE-sourced income (via permanent establishment or nexus) in determining whether they meet the AED 50 million audit threshold.
• FTA Guidance Pending for QFZPs
• Additional requirements will soon be issued for QFZPs engaged in distribution activities from Designated Zones, likely affecting many businesses operating in logistics and trading hubs.

Adoption of OECD Guidance on Global Minimum Tax (Pillar Two Framework)

In a parallel move with global implications, the UAE has announced the adoption of OECD guidance and commentary on the Global Anti-Base Erosion (GloBE) Rules under Pillar Two. This decision reinforces the UAE’s commitment to international tax standards and is expected to reshape the landscape for large multinational enterprises (MNEs).

What This Means:

• 15% Domestic Minimum Top-Up Tax (DMTT)
• Starting from January 1, 2025, a 15% DMTT will apply to MNEs with global consolidated revenue of €750 million or more in two of the last four financial years. This ensures that MNEs pay a minimum level of tax in the UAE, regardless of local incentives.
• Alignment with OECD Pillar Two Objectives
• The move is part of the UAE’s commitment to the global minimum tax framework, aiming to reduce harmful tax competition and profit shifting.
• Future Incentives Being Considered
• The Ministry is also evaluating economic incentives that are Pillar Two-compliant, such as:
  • A Research & Development Tax Credit (30–50%)
  • A High-Value Employment Credit based on qualifying UAE-based personnel
  • These are subject to legislative approval and would serve to maintain the UAE’s competitiveness while remaining compliant with international standards.

What Businesses Should Do Now

These announcements present both compliance challenges and strategic opportunities:

• Tax Groups should review their reporting processes and ensure readiness for consolidated audited financials.
• Free Zone Entities claiming QFZP status must verify audit obligations and track upcoming guidance.
• MNEs operating in the UAE should assess their exposure under the 15% DMTT and evaluate entity structuring and local substance accordingly.

The UAE’s direction is clear: aligning locally with global tax integrity initiatives while preserving its attractiveness for foreign investment through compliant and smart regulation.

This article is drafted by Marco Marazzi, Business Solutions Legal Advisor at Bizzmosis Group

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