Corporate Tax Registration for Natural Person in UAE | Guide and Deadline

Is your business self-employed, running a business, or doing business activities within the UAE? Then this article is for you; read it to understand what constitutes incomes that will be subject to the UAE corporate tax and what constitutes those that are not subject to corporate tax. 

Who Is the Liable Person for Registering Corporate Tax in the UAE?

Corporate Tax in the UAE is governed by Federal Decree-Law No. 47 of 2022, effect for the tax period beginning on or after June 1, 2023.

Generally, natural persons within the corporate tax scope are required to register for corporate tax purposes.

Also read: Corporate Tax Filing in UAE

A natural person means an individual, not a company. You may fall under this category if you,

• Resident Person.
• Non-Resident Person with a Permanent Establishment in the UAE.
• Carries any business or business-related activities which derive a total turnover of more than AED 1 million.

Who Needs to Register for Corporate Tax as a Natural Person in the UAE?

• Any Service Provider – Selling services such as consulting, writing, designing, and IT solutions, among other professional services. 
• Sole Proprietors – Operating small businesses in the UAE.
• Self-Employed Professionals – Alone traders, consultants, coaches, or experts derive income from business activities. 

Minimum Threshold  for Corporate Tax Registration in UAE

If your business’s turnover from business activities in the calendar year (Jan to Dec), exceeds AED 1 million, you should register for corporate tax in the UAE. 

Corporate Tax Exemption in UAE

Note that corporate tax shall not apply to;

1. Personal Income (Salaries/ Wages) – Any income earned as an employee. Eg; A person who works in the company and gets the monthly salary – Exempted. 
2. Personal Investments – Any investment under personal capacity which derived the return at the end. Such as dividends, stocks, and bonds. Eg; A person who invests in a share market and gets the dividend income at the end – Exempted. 
3. Real Estate Investment Income – Income obtained by investing in real estate and derived income from selling or renting properties held as a personal investment. Eg; Rent income, gain on the sale.

For example; If you have your apartment and earn AED 1.5 million income annually, it is considered as real estate investment income and is exempt. 

Steps of Corporate Tax Registration for Natural Person in UAE

The process of registering for corporate tax in the UAE is straightforward. Follow these simple steps;

1. Determine Your Eligibility

Work out your mechanism to identify total turnover/income generated during the Gregorian calendar and whether such income exceeds AED 1 million except the above exemption income source.

2. Get Ready Supporting Documents

Collect;

• Emirates ID or Passport.
• Proof of Income (like invoices, contracts, and bank statements).
• Business incorporation certificate (if any).
• Trade license (if applicable).
• Address Proof Documents (DEWA and SEWA).
• Supporting documents related to your business.

3. Register on the FTA Portal

• Visit the Federal Tax Authority (FTA) website. 
• Create logging using an email address or UAE Pass.
• Fill out the registration form accurately.

4. Submit Your Application

Verify your information for correctness before submitting. You will be approved and given your TRN.

5. Download the TRN Certificate

• Once you apply, the FTA may issue a TRN certificate or acknowledgment of the application. If they issue an acknowledgment, the FTA may take 20 business days to approve your certificate. 
• Once it is approved, you can download the certificate from Emara Tax Portal. 

Important Deadlines for Corporate Tax Registration in the UAE

In UAE corporate law, the following deadline must be achieved by a natural person to avoid penalties. 

Registration

The businesses have to determine whether their turnover has exceeded AED 1 million annually.

Scene: A person’s total turnover from his sole business for the year 2024 is AED 1.5 million except for exempt income. He must register for corporate tax on or before March 31, 2025.

Tax Return Filing

The registered natural persons shall file their CT returns and pay within 9 months of the end of the tax period.

Scene:  A business of a natural person who registered for the corporate tax year ended December 31, 2024, then he must file his tax return on or before September 30, 2025.

Deregistration

When Businesses cease, an application form is to be made within 3 months of the date of ceasing of the business or business activities.

Scene: A business of a natural person who registered for corporate tax stop operation by December 31, 2024, then must apply for tax deregistration on or before March 31, 2025. 

Tax Deregistration

Scene: If a person stops his business operation in November 2024, he needs to submit a deregistration form on or before February end 2025.

However, the FTA will not approve the tax deregistration form until he files all tax returns and pays all taxes outstanding on or before nine months from the end of the accounting period. 

Turnover for Corporate Tax Registration as a Natural Person

Turnover is a crucial determinant of your tax liability as a natural person. It is a sum of your total gross income from the business activities conducted in the UAE. 

It does not consider the aggregate value of Income derived by way of wages invested in personal real estate investment.

For instance; 

A natural person trading online goods with AED 1.75 million has to declare himself/herself for corporate tax.

But, if a portion of such receipts are on account of the sale of personal assets, not relating to business, then such amount is excluded to arrive at the turnover.

Penalty for Non-compliance in the UAE Tax Law

The FTA levies penalties for the following:

1. Failure to register/filing of tax returns beyond the stipulated time – AED 10,000.
2. Submitting inaccurate particulars, information, and documentation – An amount to be decided by the FTA of the tax payable, as its percentage.
3. For not notifying FTA registration-related changes within 20 working days – AED 5,000 per instance. 

By keeping proper records and abiding by FTA directions, such penalties may be avoided.

Conclusion

Corporate tax registration is a critical step for a natural person who conducts a business or business activities in the UAE. A natural person wants to calculate their total revenue of business or business activities for the Gregorian calendar year 2024 does not exceed AED 1 Mn not excluding wages, personal investment, and real property investment.

Any natural person who exceeds the relevant threshold for 2024, must register for corporate income tax on or before 31st March 2025.

Farahat & Company team is expert here to assist you to evaluate liable and not liable turnover and every aspect of corporate tax registration with return filling. 

Reach us today to stay compliant and focus on your growing business without stress and unwanted penalties.