Every Free Zone Company Needs an Audit, Whatever Its Size

Most UAE businesses read the audit rule as a size test: cross AED 50 million of revenue and an audit becomes compulsory. That reading is correct for them and wrong for a free zone company, because the decision names Qualifying Free Zone Persons as a separate category with no threshold attached.

What Ministerial Decision No. 84 of 2025 requires

The power sits in Article 54(2) of the Corporate Tax Law, which lets the Minister issue a decision requiring categories of taxable persons to prepare and maintain audited or certified financial statements. Ministerial Decision No. 84 of 2025 is that decision. It was issued on 25 March 2025 and applies to Tax Periods commencing on or after 1 January 2025.

Article 2(1) lists who must prepare and maintain audited financial statements: a taxable person that is not a Tax Group and derives revenue exceeding AED 50,000,000 during the relevant Tax Period, and a Qualifying Free Zone Person.

Why this is a status question, not a compliance one

This is the part that changes how the requirement should be priced. Article 5(1) of Ministerial Decision No. 229 of 2025 provides that in addition to the conditions in Article 18(1) of the Corporate Tax Law, a Qualifying Free Zone Person must meet two further conditions: its non-qualifying revenue must stay within the de minimis requirements, and it must prepare audited financial statements in accordance with Ministerial Decision No. 84 of 2025 and any decision that amends or replaces it.

The two variations most groups need to know about

Article 2(2) deals with Tax Groups. A Tax Group prepares and maintains audited special purpose financial statements, in the form, procedures and rules specified by the Authority, rather than ordinary audited statements. A Qualifying Free Zone Person cannot be in a Tax Group in any event, so in practice these two limbs never apply to the same entity.

Article 2(3) is the one that catches distributors. Without prejudice to the general requirement, a Qualifying Free Zone Person engaged in the distribution of goods or materials in or from a Designated Zone must comply with any additional procedures prescribed by the Authority. Those additional procedures now exist, and they are a separate deliverable from the audit itself, with their own deadline.

Article 2(4) covers non-residents: in calculating the AED 50 million threshold for a non-resident person, only revenue derived through permanent establishments or nexuses in the State is taken into account. That limb concerns the threshold, so it does not soften the free zone requirement, which has no threshold to soften.

Which tax periods this governs

Ministerial Decision No. 84 of 2025 applies to Tax Periods commencing on or after 1 January 2025. Article 3 repealed Ministerial Decision No. 82 of 2023, but expressly continues it for Tax Periods that commenced before 1 January 2025.

That matters for anyone reviewing an earlier year now. A 2024 Tax Period is still governed by the 2023 decision, and a company correcting historic positions has to apply the instrument that was in force for the period rather than the one in force today.

Note also how Article 5(1)(b) of Ministerial Decision No. 229 of 2025 is drafted. It refers to Ministerial Decision No. 84 of 2025 and any decision that amends or replaces it, so the condition follows the audit rules forward automatically as they change.

What to check

1. Confirm the audit is actually engaged and scoped for every free zone entity claiming Qualifying Free Zone Person status, including dormant and small ones.
2. Check the audit is of financial statements prepared under accounting standards accepted in the State, not a licence-renewal report prepared for the free zone authority.
3. Where the entity distributes goods in or from a Designated Zone, treat the additional procedures under Article 2(3) as a second, separate deliverable with its own deadline.
4. For any Tax Period commencing before 1 January 2025, apply Ministerial Decision No. 82 of 2023 rather than the 2025 decision.
5. Diarise the audit against the return deadline, since the condition has to be met for the Tax Period rather than at some later convenient point.

Ministerial Decision No. 84 of 2025 was issued on 25 March 2025 and came into effect on the date of its issuance. Confirm the position for your own facts and your own tax periods before relying on it.