Defining Business in UAE Corporate Tax Law
The UAE started its new corporate tax law in 2023. Many people and companies must now follow these rules. Mubarak Al Ketbi (MAK) Auditing always helps clients understand business terms under this law. A business means any kind of economic activity, either for a long time or a short time, done by a person or a company.
You don’t need to earn profit for your activity to count as a business. Even if you don’t make money, you can still run a business if your work is organized. Companies need to review everything they do or own to see if the law treats it as a business.
Examples of what counts as a business:
- Trading goods or services (retail, wholesale, or online)
- Manufacturing or making goods from parts or materials
- Providing professional services (like accounting, law, engineering, or advertising)
- Owning or managing assets (like renting property, investing in shares, or licensing intellectual property)
Even if your main goal isn’t profit, the law may still see your activity as a business.
What Is Business Activity?
A business activity means anything you do as part of running your business. You don’t need to work every day. Even if you do something once, it can count as a business activity.
The law checks if your activity creates value and is organized. If you’re just doing something personal, it usually isn’t a business activity. Companies must check if every action they take is a business activity.
Some examples include:
- Signing contracts to sell or buy goods or services
- Making or getting goods for your business
- Doing marketing or advertising for your products
- Handling money (raising capital, investing, or managing costs)
- Hiring, training, or paying workers
Almost every action of a company is a business activity unless proven otherwise.
Business and Business Activity for Natural Persons
The law says a “business” is anything that makes income. This applies to both people and companies. But the law gives some exceptions for natural persons.
Income that does NOT count as business activity for a person:
- Salaries or wages from a job
- Personal investment income (dividends, interest, profit from stocks or bonds)
- Income from renting property for investment (unless you develop or manage property as a business)
Even if you earn money from these, you might not need to pay corporate tax if you’re not running a business.
What Businesses Need to Know for Compliance
Companies in the UAE should understand what counts as a business or business activity. This helps them know if they must register for tax and file returns.
Main points to consider:
- Register for corporate tax if you do taxable activities.
- File annual tax returns on time.
- Check if your business can get exemptions or deductions.
- Learn the law for your type of activity (retail, free zone, charity, etc.)
If you’re not sure, ask Mubarak Al Ketbi (MAK) Auditing for help with compliance.
When to Seek Professional Help
Understanding tax law in the UAE can be tricky. Mubarak Al Ketbi (MAK) Auditing has a team ready to guide you. You should get help if you want to:
- Know which of your activities count as business
- Find out when to register and file for corporate tax
- Claim every possible deduction or exemption
- Structure your business to get better tax results
- Respond to tax questions or audits from the government
Our experts always try to give clear answers and support you with UAE rules.
How Mubarak Al Ketbi (MAK) Auditing Can Help You
Navigating the business tax law in the UAE can feel like finding a needle in a haystack! Mubarak Al Ketbi (MAK) Auditing stands ready to help at every step.
We support you by:
- Explaining which of your actions count as business or business activity
- Helping you register and file tax returns correctly
- Finding deductions and exemptions for your business
- Training your staff on compliance rules
- Protecting your business from fines and penalties
For more information:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Or contact/WhatsApp: +971 50 276 2132
