Many individuals in the UAE run small businesses without realising they might fall under the corporate tax system. It becomes more complicated when you’re not a company but a person running a side hustle, offering freelance services, or working on small contracts. You’re not a big corporation, so do you still need to register for corporate tax in UAE?
Here’s the good news: the rules for natural persons are now clear. If you’re earning more than AED 1 million a year from business activities in the UAE, registration is a must. This guide breaks it down so you can take the right steps with confidence.
To understand your tax liabilities better, take assistance from Tax Gian, top corporate tax consultants in UAE.
Who is a Natural Person under Corporate Tax in UAE?
In tax terms, a natural person is just an individual—not a company—who earns income through business or professional activities.
Not every natural person needs to register for corporate tax. The main deciding factor is your business turnover. If you make more than AED 1 million per calendar year (January to December), then registration is required.
When Does a Natural Person Need to Register for Corporate Tax in UAE?
You are not required to register if:
- Your total business income stays under AED 1 million per year.
- You only earn income from your job (wages).
- Your income comes from personal investments or real estate (unless it’s part of a licensed business).
These income types are not treated as taxable business activities under the UAE Corporate Tax Law. You can also ask the best corporate tax consultants in UAE to know your liabilities better.
What is a Business Activity for a Natural Person?
A business activity is anything done with the aim of making a profit. This includes:
- Selling goods or services
- Offering consultancy or freelance services
- Running an online store
- Providing tech support or software development
- Operating a car rental or logistics business
If you do any of the above and earn more than AED 1 million a year, corporate tax registration in UAE is required.
Corporate Tax UAE: Resident vs. Non-Resident Natural Persons
Both UAE residents and non-residents may need to register. Here’s how it works:
- Resident Natural Persons: If you live in the UAE and run a business that earns more than AED 1 million annually, registration is mandatory.
- Non-Resident Natural Persons: If you don’t live in the UAE but earn business income from UAE clients, and it exceeds the threshold, you also need to register.
How is Turnover Calculated?
Turnover means the total amount earned from your business before expenses are deducted. Only business income is considered in this calculation.
The full calendar year is used to measure your turnover. So, if your total income from January to December exceeds AED 1 million, it triggers the requirement to register for corporation tax in UAE.
Corporate Tax Registration Process for Natural Persons
If your business income goes over the limit, here’s how to register:
- Log in to the Federal Tax Authority (FTA) online portal (Emaratax).
- Fill in your personal details (name, nationality, Emirates ID/passport).
- Submit business information (name, type of service, trade license if any).
- Upload supporting documents (bank statements, contracts, etc.).
- Submit the application.
Once submitted, the FTA reviews the application and approves it if everything is in order. If your application gets rejected, try consulting a tax consultant in UAE.
How can Tax Gian help?
The corporate tax system may seem complex, but it’s built around clear thresholds. If you’re a natural person earning business income in the UAE and want to understand your tax liabilities better, consult our expert tax consultants in the UAE. They will help you register on time and make you understand how the system works. Consult our experts today!
FAQs
1. Do I need to make a new account on Emaratax if I am already registered for VAT or Excise Tax in UAE?
If you are already registered for VAT or Excise Tax, you don’t need to start from scratch. You just need to update your records through the same FTA portal and submit an application for Corporate Tax to include your corporate tax status.
2. What to do If I Stop Doing Business?
If you stop working, you can deregister. But before that, you must:
- File all pending Corporate Tax Returns till date.
- Submit a Deregistration application.
- File your final tax return on receipt of Pre Approval from FTA
- Clear any unpaid taxes or Penalties or other dues to FTA
- Only after this can the FTA approve your deregistration.
3. What can happen if I don’t register for corporate tax in UAE?
If a natural person falls under the category of registering for corporate tax in UAE and does not register, the FTA will take notice. The FTA will start its inquiry against the natural person. This will result in hefty penalties, so it’s better to register on time.
4. Who can help me register for corporate tax UAE?
If you are finding it difficult to make an account on Emaratax and apply for registration. Or if your application gets rejected, you can try consulting a tax consultant in UAE. They will help you immediately make an account and register.
