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.