LMKG Chartered Accountants

Financial Statements

  • Taxable Persons that earn Revenue that does not exceed AED 3,000,000 in the Tax Period may use the Cash Basis of Accounting.369
  • Once a Taxable Person’s Revenue exceeds AED 3,000,000 in the Tax Period, they must prepare Financial Statements using the Accrual Basis of Accounting except under exceptional circumstances and following the FTA’s approval.370
  • Taxable Persons must prepare Financial Statements in accordance with IFRS. However, Taxable Persons that earn Revenue that does not exceed AED 50,000,000 may apply IFRS for SMEs.
  • The FTA can, by notice or by issuing a decision, request a Taxable Person to submit the Financial Statements used to determine their Taxable Income.
  • Where a Taxable Person is a partner in an Unincorporated Partnership, the FTA can request the partner to submit Financial Statements that show both the partnership’s overall assets, liabilities, income and expenditure, and the partner’s distributable share of assets, liabilities, income and expenditure.
  • Some Taxable Persons may be required to maintain audited Financial Statements. This means that the Financial Statements must be checked by an external licensed auditor.
  • The following Persons are required to maintain audited Financial Statements:
  • A Taxable Person deriving Revenue exceeding AED 50,000,000 during the relevant Tax Period; and

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