UAE Corporate Tax for Natural Persons: Key Info & Rules
Businesses in the UAE need to know the basic tax rules if they want to stay out of trouble. When the UAE brought in corporate tax law, things became more complex for everyone. Every business, big or small, must know the tax details that apply. This article explains the main tax rules for natural persons under the UAE corporate tax law.
Who Counts as a Natural Person for UAE Corporate Tax?
A natural person is anyone who does business or business activities in the UAE.
- This can be someone with a permanent place in the country.
- If you get income from within the UAE, the tax law considers you a natural person.
How Does Corporate Tax Apply to Income & Turnover?
If you run a business in the UAE and your turnover is more than AED 1 million, you must pay corporate tax.
- Income from business activities over this threshold gets taxed.
- If your turnover stays under AED 1 million, you don’t need to register or file a corporate tax return.
Note:
- Money from personal investments, real estate, or your job salary doesn’t count towards the AED 1 million.
- Only business income matters for this rule.
What’s the Tax Year for Natural Persons?
Natural persons use the regular calendar year for taxes in the UAE.
- The tax year starts on January 1 and ends on December 31.
When Do You Need to Register for Corporate Tax?
You must register for UAE corporate tax if your business turnover crosses AED 1 million during any calendar year.
- If this happens in 2024, you must register before March 31, 2025.
- Failing to register on time brings a penalty of AED 10,000.
When and How Do You Deregister from Corporate Tax?
If your business closes, stops, or ends for any reason, you must apply to deregister.
- You need to apply within 3 months after the business ends.
- This keeps you out of trouble with tax authorities.
What Are the Rules for Financial Statements?
Natural persons who pay corporate tax must keep proper financial statements.
- If turnover is under AED 3 million, you may use the cash basis with FTA approval.
- Otherwise, use the accrual basis and follow IFRS standards.
- For turnover under AED 50 million, use IFRS for SMEs.
- If you make more, your financials need an audit.
- Keep your records for at least 7 years after the tax period ends.
When Do You File Your Corporate Tax Returns?
Natural persons must file corporate tax returns within 9 months of the end of the tax year.
How Mubarak Al Ketbi Chartered Accountants Can Guide You
Mubarak Al Ketbi Chartered Accountants has a skilled team of tax experts who know UAE’s corporate tax, VAT, and excise tax rules. We’ll help you file taxes, prepare records, and avoid penalties. When it comes to tax, “Don’t let the grass grow under your feet”—let us help you stay ahead!
- For more information, visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud, Dubai – UAE
- Contact/WhatsApp us: +971 50 276 2132
