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This page only covers what the sources we hold say. The corporate tax law taxes a natural person on business activity, and only if turnover from UAE business activity goes above AED 1 million in a Gregorian calendar year. The rule applies to calendar years starting on or after .
Source: Federal Tax Authority, basis of taxation for natural persons, checked .
We say nothing here about other kinds of personal income. Our fact base does not cover them, so for anything outside business activity, check the current rule on the FTA site or ask an adviser.
Who counts as a resident person
The corporate tax law lists three kinds of resident person: UAE juridical persons including free zone persons, foreign juridical persons effectively managed and controlled in the UAE, and natural persons who conduct a business or business activity in the UAE. That third group is the one this page is about. If a foreign tax office asks you to prove that you are UAE tax resident, that is a separate FTA service: see the tax residency certificate guide.
Source: Federal Tax Authority, corporate tax law, Article 11, checked .
The threshold in practice
| Item | Rule |
|---|---|
| What is measured | Turnover from UAE business activity |
| Threshold | Above AED 1 million in a calendar year |
| Applies from | Calendar years starting on or after |
| Resident natural person registers | By 31 March of the following calendar year |
| Non-resident natural person registers | Within 3 months of meeting the requirements |
Source: Federal Tax Authority, registration timeline (FTA Decision No. 3), checked .
The question that matters is whether you run a business. A person with a trade licence, a freelance permit or a sole establishment who sells goods or services in the UAE conducts business activity. Whether a particular side income counts is a fact question. Take it to an adviser.
What to do if you may be near the line
- Add up turnover by calendar year. Use invoices and bank receipts for the UAE business activity.
- Track it monthly. Do not wait for the year end to learn you passed the threshold.
- Plan the registration. If you are above the line, the deadline is 31 March of the next year for a resident. See corporate tax registration.
- Keep records. Corporate tax records are kept for 7 years after the end of the tax period. See record keeping rules.
- Get the filing deadline right. See corporate tax deadlines.
Rate
Once a person is taxable, the corporate tax rates apply: 0% on taxable income up to AED 375,000 and 9% on the part above it. The details are in the corporate tax guide.
Source: u.ae, corporate tax, checked .
What we do not know
The Cabinet decision number that sets the AED 1 million threshold is not confirmed in our sources. If you need to cite it, check the FTA site. For the wider picture of UAE taxes, see the UAE tax guide and who pays corporate tax.
A short example of the test
Suppose a person runs a trade-licensed consultancy in the UAE. If the year's invoices add up to less than AED 1 million, the threshold is not met. If they add up to more, turnover is above the threshold. This is an illustration only. Whether a particular income is business activity is for an adviser to confirm, and the figure is turnover, not profit.
Records for an individual with a business
A natural person in business has the same record duty as a company. Corporate tax records are kept for 7 years after the end of the tax period. Not keeping required records is fined at AED 10,000 per violation, and AED 20,000 if repeated within 24 months. Keep sales invoices, bank statements and the working behind any figure you give the FTA. A simple bookkeeping routine from the first month is cheaper than rebuilding a year later.
Source: Federal Tax Authority, corporate tax law Article 56 and administrative penalties, checked .
Getting help
If you are close to the threshold, a short call with a firm that knows corporate tax can settle the question. Use the quote form below and say that you are an individual with a licence, not a company.
