Corporate Tax Liability of a Natural Person in UAE
The UAE’s Corporate Tax system introduced in 2023 applies to natural persons under specific circumstances.SBR is a tax exemption program offered by the UAE government to qualifying small businesses. This means that eligible businesses are not required to pay Corporate Tax on their profits.
Who is Taxable?
- Only natural persons engaged in a Business or Business Activityin the UAE are subject to Corporate Tax. This excludes income from employment, personal investments, and real estate.
- There's a turnover threshold: Your annual turnover from UAE business activities must exceed AED 1 million (around USD 272,200) to be taxable
Examples of Taxable Activities
- Freelancing or consulting services
- Operating a retail store or restaurant
- Operating through a sole establishment license
Examples of Exempt Activities
- Salary income from employment
- Dividends received from investments
- Rental income from a residential property
Registration and Compliance
- If you exceed the AED 1 million threshold, you'll need to register for Corporate Tax and obtain a Tax Registration Number.
- You'll be responsible for filing tax returns and paying any taxes due.
Have questions about how Corporate Tax provisions apply to your business? Reach out to our team for expert advice.
Team TFAB