UAE Corporate Tax Update for Natural Person

The Ministry of Finance (MoF) in UAE has published Cabinet Decision No. (49) of 2023 specifying the Categories of Businesses or Business Activities Conducted by a Resident or Non-Resident Natural Person that are Subject to Corporate Tax. As per the released Decision:

1. Income from business activities conducted by a resident or non-resident natural person in UAE will be subject to CT only, where the total turnover exceeds AED 1 million in a calendar year.

2. Following sources of income will not be considered as generated from businesses or business activities for the purpose of calculation of the AED 1 million thresholds:

a) Wages (salary) income earned;

b) Personal Investment Income (investments not conducted through a license or do not require a license or do not qualify as a commercial business)

c) Real Estate Investment Income (from the sale, leasing, sub-leasing, and renting of land or real estate property in UAE that does not require a license)

3. Natural persons earning income from businesses or business-related activities below AED 1 million will not be required to register for CT.

This decision is a big relief to both local and foreign investors and creates an attractive business environment fueling economic growth.

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