UAE Corporate Tax for Natural Persons in 2026: the AED 1,000,000 Threshold, Registration and the Tax Return

A natural person in the UAE pays corporate tax only where that person conducts a business and the gross turnover from that business exceeds AED 1,000,000 in a Gregorian calendar year. The threshold sits in Article 2(1) of Cabinet Decision No. 49 of 2023. Below it, no registration is required at all. Above it, the natural person becomes a Taxable Person and must register, keep records, file a return and pay tax at 9% on taxable income above AED 375,000.

Important. The threshold is measured on turnover, not profit. The rate applies to profit. These are two different figures: turnover of AED 1,200,000 against costs of AED 1,100,000 triggers the duty to register and file, yet the tax payable is nil, because taxable income of AED 100,000 does not exceed AED 375,000.

The second point reframes the whole picture: wages, personal investment income and real estate investment income are not a business and do not enter turnover at all — whatever the amount. That is stated in Article 2(2) of Cabinet Decision No. 49 of 2023. Someone with a salary of AED 3,000,000 and rental income of AED 5,000,000 from their own apartments has no obligation either to register or to file.

Key parameters as at September 2026

Parameter	Position	Source
Turnover threshold	AED 1,000,000 in a Gregorian calendar year	Cabinet Decision 49/2023, art. 2(1)
Excluded from turnover	wages, personal investment income, real estate investment income	Cabinet Decision 49/2023, art. 2(2)
0% rate	taxable income up to and including AED 375,000	Cabinet Decision 116/2022, art. 2(1)
9% rate	taxable income above AED 375,000	Decree-Law 47/2022, art. 3(1)(b)
Tax Period	the Gregorian calendar year, 1 January to 31 December	Decree-Law 47/2022, art. 57; guide CTGRNP1, s. 3.3.2
First possible period	the 2024 calendar year	Guide CTGRNP1, s. 3.3.2
Re­gistra­tion deadline	31 March of the year following the year the threshold was exceeded	FTA Decision 3/2024, art. 5
Filing and payment deadline	9 months from the end of the Tax Period	Decree-Law 47/2022, arts. 48 and 53(1)
Late registration penalty	AED 10,000	Cabinet Decision 75/2023, item 14
Waiver of that penalty	file the return for the first period within 7 monthsinstead of 9	FTA Public Clarification CTP006
Small Business Relief	revenue up to AED 3,000,000 — treated as having no taxable income	Ministerial Decision 73/2023 as amended by 131/2026
How long SBR runs	Tax Periods ending on or before 31 December 2029	Ministerial Decision 131/2026, art. 1
Accounting standards	IFRS; IFRS for SMEs where revenue is up to AED 50,000,000	Ministerial Decision 114/2023, art. 4
Cash basis	permitted where revenue is up to AED 3,000,000	Ministerial Decision 114/2023, art. 2
Audit required	where revenue exceeds AED 50,000,000	Ministerial Decision 84/2025, art. 2(1)(a)
Record retention	7 years after the end of the Tax Period	Decree-Law 47/2022, art. 56(1)
Dere­gistra­tion	application within 3 months of cessation of the business	FTA Decision 6/2023, art. 2(1)
Notifying a change of details	20 business days	Cabinet Decision 74/2023, art. 6(4)
Filing portal	EmaraTax; also Tas’heel service centres	FTA press release, 28.01.2025

The normative base: which acts are in force, and in which version

The corporate tax regime for natural persons rests on one law, one Cabinet decision and one FTA decision. Everything else is supplementary legislation and non-binding guidance.

The three acts the regime cannot work without

First: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. Issued 3 October 2022, in force 25 October 2022, published in Official Gazette No. 737 (supplement) of 10 October 2022. It applies to Tax Periods commencing on or after 1 June 2023 (art. 69).

Second: Cabinet Decision No. 49 of 2023 specifying the categories of business or business activity conducted by a resident or non-resident natural person that are subject to corporate tax. Issued 8 May 2023 (18 Shawwal 1444 AH), in force 1 June 2023, published in Official Gazette No. 751 of 15 May 2023. Status: active, never amended.

Third: FTA Decision No. 3 of 2024 on the registration timeline for corporate tax purposes. Issued 22 February 2024, in force 1 March 2024. It is this decision, not the law itself, that fixes 31 March as the date for natural persons.

The amendment chain of Decree-Law 47/2022

Decree-Law 47/2022 has been amended three times. None of the three amendments touched the provisions governing natural persons.

Amending act	What it changed	Affects natural persons
Decree-Law No. 60 of 2023 (issued 02.10.2023)	added the Top-up Tax and Multinational Enterprise definitions to art. 1; added art. 3(3); replaced art. 65	no
Decree-Law No. 40 of 2024	replaced art. 45 (withholding tax) and art. 46 (withholding tax credit)	no
Decree-Law No. 28 of 2025	replaced art. 44 (calculation and settlement of tax); added art. 49 bis (claiming unused tax credits)	no

The practical consequence: articles 3, 11, 12, 20, 21, 48, 51, 52, 53, 56 and 57 — the provisions on which the taxation of a natural person depends — still read exactly as enacted in 2022. This was checked against the consolidated text of the law as at January 2026 published by the UAE Ministry of Finance.

The supplementary acts

Act	Issued	In force	What it governs
Cabinet Decision 116 of 2022	30.12.2022	15 days after publication in OG 743 of 16.01.2023	the amount taxed at 0% — AED 375,000
FTA Decision 6 of 2023	07.04.2023	01.06.2023	the dere­gistra­tion application deadline
FTA Decision 1 of 2025	17.02.2025	01.03.2025	grounds for extending an appeal deadline
Ministerial Decision 73 of 2023	03.04.2023	15 days after publication	Small Business Relief
Ministerial Decision 82 of 2023	10.04.2023	15 days after publication	mandatory audit; repealed by Decision 84/2025
Ministerial Decision 114 of 2023	09.05.2023	the day after publication	accounting standards and methods
Cabinet Decision 74 of 2023	10.07.2023	01.08.2023	executive regulation of the Tax Procedures Law
Cabinet Decision 75 of 2023	10.07.2023	01.08.2023	admi­nistra­tive penalties
Cabinet Decision 10 of 2024	22.02.2024	01.03.2024	inserted the AED 10,000 late registration penalty into Decision 75/2023
FTA Decision 3 of 2024	22.02.2024	01.03.2024	registration timelines
Ministerial Decision 261 of 2024	28.10.2024	01.06.2023 (retro­specti­vely)	partnerships and family foundations; repealed Ministerial Decision 127/2023
Cabinet Decision 63 of 2025	14.05.2025	01.06.2023 (retro­specti­vely)	an uni­ncorpo­rated partnership as a taxable person in its own right
Ministerial Decision 84 of 2025	25.03.2025	on the date of issuance	mandatory audit for periods from 01.01.2025
Ministerial Decision 131 of 2026	29.07.2026	the day after publication	SBR extended to 31.12.2029

Note the two repealed instruments: Ministerial Decision 82/2023 was repealed by Decision 84/2025, and Ministerial Decision 127/2023 by Decision 261/2024. The FTA guide on the taxation of natural persons, published in November 2023, still cites it — the first sign that guidance ages faster than legislation. The detail is in the accounting section below.

What is not law

The FTA guides (CTGTNP1, CTGRNP1, CTGREI1) and public clarifications (CTP006) are not legally binding.Each carries an express reservation: the document is based on the legislation as it stood at the date of publication and does not modify the requirements of any legislation. They can and should be used as an aid to interpretation; they cannot be cited as the rule itself.

Who counts as a natural person, and when they become a resident

A natural person for UAE corporate tax purposes is a living human being of any age, whether resident in the UAE or elsewhere. That is the definition in section 3.2 of FTA guide CTGRNP1. It is broader than the everyday sense: it captures sole establishments and individual partners in unincorporated partnerships.

Residence follows the activity, not the visa

Article 11(3)(c) of Decree-Law 47/2022: a Resident Person includes a natural person who conducts a Business or Business Activity in the State. That is the only test. Nationality, a residence visa and time physically spent in the country make no difference to residence for corporate tax purposes.

Section 3.2.1 of CTGRNP1 pushes the rule to its limit: a natural person living outside the UAE — with a home in another country, for instance — becomes a Resident Person for corporate tax purposes if they conduct business in the UAE.

The formula in the same section: absent an applicable double taxation agreement, any natural person conducting a business or business activity in the UAE is a Resident Person for corporate tax purposes.

When a natural person can be a non-resident

Section 3.2.2 of CTGRNP1: a natural person becomes a non-resident only through a double taxation agreement.Where a person lives in a country with a treaty in force with the UAE, and under that treaty is not resident in the UAE but has a permanent establishment here, they are a Non-Resident Person taxable in the UAE on that permanent establishment.

Without a treaty, a natural person cannot be a non-resident with a permanent establishment in the UAE — they will be treated as a resident. That is stated expressly in the same section of the guide.

A separate case: a natural person living outside the UAE who derives state sourced income not connected with a business they conduct in the UAE. Such income may be subject to withholding tax — currently at 0% — and does not require registration with the FTA.

Minors and incapacitated persons

The corporate tax obligations of a minor or an incapacitated person are discharged by their Legal Representative.The basis is article 7 of the Tax Procedures Law and Cabinet Decision No. 74 of 2023. Age alone is no exemption: if a minor formally conducts a business with turnover above AED 1,000,000, the obligations arise.

What “business” and “business activity” mean

Business is defined in article 1 of Decree-Law 47/2022 as any activity conducted regularly, on an ongoing and independent basis. The law lists examples: industrial, commercial, agricultural, vocational, professional, service or excavation activities, and any activity related to the use of tangible or intangible property.

Business Activity is any transaction or activity, or series of transactions or activities, conducted by a person in the course of its business.

The key qualification in CTGRNP1 (s. 3.2.3): “ongoing” should not be interpreted so as to exclude short-term activities. That is precisely why the law speaks of the “conduct” of a business rather than the “carrying on” of one. A one-off short-term commercial project can fall within corporate tax.

The counter-example from the same section: taking part in a lottery or a game show and winning a prize is not normally a business or a business activity.

The AED 1,000,000 threshold: what actually goes into the calculation

Turnover is the gross amount of income derived during a Gregorian calendar year. The definition sits in article 1 of Cabinet Decision 49/2023 and is repeated in the glossary of guide CTGRNP1. “Gross” means the figure before any costs are deducted.

Article 2(1) of Cabinet Decision 49/2023: the business or business activity of a natural person is subject to corporate tax only where the gross revenue from it exceeds AED 1,000,000 within one calendar year.

A difference in terminology worth understanding

Cabinet Decision 49/2023 uses the term Revenue, defining it as gross income in a calendar year. FTA Decision 3/2024 and the FTA’s own pages use the term Turnover.

Guide CTGTNP1 (s. 3.12) resolves the tension: for a natural person, revenue equals turnover, because the tax period of a natural person is the calendar year. The divergence is one of wording, not of substance: both figures are computed the same way.

What is added together

Section 3.3.1 of CTGRNP1: turnover includes gross income for the calendar year from all categories of business and business activity the natural person conducts in the UAE.

Included in turnover	Not included
revenue of a sole establishment	wages and any payment under an employment contract
the distributive share of income in a fiscally transparent uni­ncorpo­rated partnership	personal investment income
revenue of the second, third and any further business of the same person	real estate investment income
dividends received in the course of a business activity through a business account	dividends received in a personal capacity
income from clients outside the UAE, where it relates to the business conducted in the UAE	lottery or game show winnings

The threshold is measured across all of one person’s businesses combined, not business by business. Three separate projects at AED 400,000 each produce combined turnover of AED 1,200,000 and a duty to register.

The accounting method decides when income is recognised

Section 3.3.1 of CTGRNP1 and article 2 of Ministerial Decision 114/2023: turnover is measured on the accrual basis, except where the natural person applies the cash basis of accounting. The cash basis is available where revenue is up to AED 3,000,000, or in exceptional circumstances on application to the FTA.

The practical consequence: on the accrual basis, an invoice issued but unpaid already counts in the turnover of the year it was issued. Someone who invoices AED 300,000 in December for payment in January books it in the December year on the accrual basis.

An example from the FTA guidance

Example 16 of CTGTNP1: a natural person receives a salary of AED 300,000, a bonus of AED 150,000 and AED 900,000 from selling cupcakes. Turnover is AED 900,000, because the salary and bonus are excluded. The threshold is not exceeded and no registration is required.

Example 3 of CTGRNP1 shows the reverse: the owner of a small bakery with revenue of AED 900,000 buys shares in a flour supplier through the business account and receives dividends of AED 500,000. Combined turnover is AED 1,400,000 and the threshold is exceeded. The dividends counted precisely because they were received in the course of a business activity through the business account rather than in a personal capacity.

That example is the most underrated trap in the regime: keeping personal and business accounts apart has direct tax consequences. How the registration itself works and what to prepare in advance is set out in our guide to corporate tax registration in the UAE.

The three exclusions: wages, personal investment and real estate investment

Cabinet Decision 49/2023 was made under article 11(6) of Decree-Law 47/2022 — the provision instructing the Cabinet to specify which categories of a natural person’s business fall within corporate tax. The FTA names that link itself, in footnote 4 to guide CTGREI1: “Article 11(6) of the Corporate Tax Law read with Article 2(1) of Cabinet Decision No. 49 of 2023”.

Article 2(2) of Cabinet Decision 49/2023 takes three sources of a natural person’s income outside corporate tax — whatever the amount.

The wording: income derived by a natural person from the following sources shall not be subject to corporate tax, regardless of the amount: (a) wage; (b) personal investment income; (c) real estate investment income.

The three definitions in article 1 of the same decision

Term	Definition	The decisive feature
Wage	remuneration given to an employee under an employment contract, in cash or in kind, including allowances and bonuses	an employment relationship exists
Personal Investment	investment activity for personal benefit that is neither conducted through a licence nor requires one from a licensing authority, and is not treated as a commercial business under Decree-Law 50/2022	no licence, and not commercial
Real Estate Investment	any investment activity directly or indirectly related to the sale, lease or sub-lease of land or real estate in the UAE, neither conducted through nor requiring a licence	no licence

The common denominator of the last two exclusions is the licence. It is the presence, or the requirement, of a licence that turns personal investment activity into a taxable business.

Directors’ fees

Section 3.8.1 of CTGTNP1: director fees will generally not be considered a business or business activity and so are not subject to corporate tax. That is a separate clarification which does not follow directly from the text of Decision 49/2023, and it settles the question for people receiving directors’ fees from several companies.

Example 10 of the same guide goes further: remuneration received by a board member for attending board meetings would typically be considered a wage in the same way as an employee’s salary, and so is not subject to corporate tax.

The qualification in the same section: whether a natural person is an employee and earns remuneration as such is a question of fact, determined case by case.

What “no registration required” means

Article 2(3) of Cabinet Decision 49/2023: a natural person who does not conduct a business subject to corporate tax under that article is not required to register for corporate tax.

The FTA’s “Basis of Taxation — Natural Person” page puts the same point directly: natural persons should not register if they do not conduct a business, or if turnover does not exceed AED 1,000,000.

This matters more than it looks: registering unnecessarily creates permanent obligations. Once registered, a natural person must file a return every year — including a nil return — and deregistration is available only on complete cessation of the business, not when turnover falls back below the threshold.

Examples from the guidance

Example 2 of CTGRNP1: a natural person receives a salary from Company A and dividends from Company B, in which they invested. No registration is required: a salary and dividends held in a personal capacity are not a business, and neither enters the turnover calculation.

Example 5 of the same guide: a natural person receives rental income of AED 1,500,000 from two apartments bought as a real estate investment. No registration is required, even though the amount is half as large again as the threshold.

The boundaries of the real estate exclusion are set out separately below — they are more intricate than they look, and we examined them at length in our article on the taxation of real estate income in the UAE.

Real estate investment: where the exclusion stops

FTA guide CTGREI1, “Real Estate Investment for Natural Persons” (October 2024), is the only document that works through this exclusion in detail. It also shows how narrowly it is built.

The list of activities is closed

Section 4.2.1 of CTGREI1: the list of activities is exhaustive — selling, leasing or renting, and sub-leasing. The guide’s exact wording adds one qualification: no other activity constitutes real estate investment unless it is directly or indirectly related to those three.

The second condition in the same section: the income must be earned from utilising the property itself, not from services rendered in relation to it. Managing someone else’s property is a service rather than the use of the asset, and it falls outside the exclusion.

The third condition: where the activity is conducted through a licence, or requires one, the exclusion does not apply.

What counts as real estate

Section 4.2.2: real estate is any area of land over which rights, interests or services can be created; any building, structure or engineering work permanently attached to land or the seabed; and any permanently attached fixture or equipment.

Within the exclusion	Outside it
residential property	property management services
furnished holiday homes — where no licence is held	holiday home letting conducted under a Dubai DET licence
commercial property, showrooms, warehouses	real estate brokerage and agency services
storage rooms, parking lots, garages	licensed development activity
property located outside the UAE	property held as part of a licensed business

Section 4.2.2 states expressly that it is irrelevant whether the occupant uses the property for their own business.Letting a warehouse to a company does not turn the landlord into an entrepreneur.

The same section: the exclusion applies regardless of the size, quantity or value of the property owned and regardless of the amount of income derived. The owner of twenty apartments earning AED 8,000,000 remains outside corporate tax, provided no licence is held or required.

The territorial question: the decision and the guide diverge

The definition in article 1 of Cabinet Decision 49/2023 speaks of investment activity related to the sale, lease or sub-lease of land or real estate property in the State. It says nothing about foreign property.

Section 4.2.2.1 of CTGREI1 is wider: the exclusion applies to investment activities conducted in the UAE in relation to land or real estate property located in the UAE and/or outside of the UAE.

The divergence resolves in favour of the guide, and here is why. Article 12(2) of Decree-Law 47/2022 brings into the taxable income of a resident natural person only income relating to the business they conduct in the UAE. Passive rental income from a foreign apartment does not relate to such a business at all — it falls outside the base not through the Decision 49/2023 exclusion but because it is not a UAE business in the first place. The outcome is the same; the reasoning is not.

The practical consequence: the FTA’s position can be relied on, while remembering that the letter of Decision 49/2023 is confined to UAE property and that the guide is not legally binding.

Ejari and Tawtheeq are not licences

Section 4.2.2.3 of CTGREI1 is the single most valuable clarification in the document. Ejari tenancy registration in Dubai and Tawtheeq in Abu Dhabi are administrative records, not licences. Holding an Ejari registration does not, by itself, remove a landlord from the exclusion.

The same section establishes the converse: a document issued by the Dubai Department of Economy and Tourism permitting the leasing of holiday homes is a licence. An owner who obtains that permission is conducting a licensed business, and the income enters turnover.

Section 4.2.2.2 lists the licensing authorities: the Departments of Economic Development in each emirate, the Abu Dhabi Department of Culture and Tourism, the Abu Dhabi Department of Municipalities and Transport, the Dubai Department of Economy and Tourism, the Dubai Land Department and the Sharjah Real Estate Registration Department. Free zones are licensing authorities too.

Not holding a licence is no help if one was required

Section 4.2.2.4: the phrase “required to be conducted through a licence” covers the case where a licence was required but never obtained. The absence of a licence does not put the activity outside corporate tax — it simply adds a licensing breach to the tax consequences.

A managing agent does not break the exclusion

Section 4.2.3 of CTGREI1: investment activity can be conducted by the natural person directly or indirectly, through an intermediary, which may be an agent or a property management company.

Example 5 of the same guide: an apartment owner receives rental income through a third-party management company that holds the appropriate property management licence and is itself a taxable person; the tenancy agreements name the natural person as landlord, owner or lessor. The guide concludes that it is not relevant to the natural person that the agent holds a licence, that the use of an agent does not alter the nature of the income or to whom it belongs, and that the income stays outside corporate tax.

This cuts against the common assumption that appointing a licensed manager turns a letting into a business. What matters is the owner’s licence, not the agent’s.

A licence of your own does break it

Example 6 of CTGREI1: a natural person owns properties in Abu Dhabi and Dubai and in February 2024 sets up a sole establishment holding a licence to manage self-owned properties. A sole establishment has no separate legal personality, so the licence is held by the natural person — and the whole of the rental income stops being real estate investment income and becomes subject to corporate tax if the AED 1,000,000 threshold for the 2024 calendar year is crossed.

The exclusion has a symmetrical cost

Section 4.3 of CTGREI1: where real estate investment income is outside corporate tax, expenditure relating to it directly or indirectly is not deductible. The profits are not included in taxable income, and a loss is not eligible for any corporate tax relief.

Section 4.4.1 adds the mechanics for mixed cases: shared costs are allocated between the excluded and the taxable activity on a fair and consistent apportionment basis — headcount, floor space, usage, time spent or any other measurable and reasonable measure — and the chosen method must be applied consistently from period to period unless the facts change.

Jointly owned property is assessed owner by owner

Section 4.5 of CTGREI1: where land or real estate is co-owned, the income from the investment activity is allocated to each owner, and each joint owner assesses individually whether their share is real estate investment income on their own facts and circumstances.

Example 11 shows the result: two brothers inherit 25 villas, 50% each; 22 are let as holiday homes through one brother’s licensed sole establishment, while three are let as residential property jointly and without a licence. The same building can produce taxable income for one co-owner and untaxed income for the other.

Section 4.4 closes the structure: under self-assessment, the natural person must clearly demonstrate the basis on which non-business real estate income is separated from business income. The burden sits with the taxpayer. Where the property is used commercially, it is worth settling the position on commercial real estate for business in the UAE first.

Personal investment: the licence test and the commerciality test

The personal investment exclusion is built as a double test: the activity must neither be conducted through a licence nor require one, and it must not qualify as a commercial business under Federal Decree-Law No. 50 of 2022 (the Commercial Transactions Law).

Failing either test is enough to bring the income into turnover.

The first test: the licence

Section 3.8.2 of CTGTNP1 lists the licence types, any of which breaks the exclusion: industrial, commercial, crafts, tourism, agricultural, professional and freelance licences.

The freelance licence in that list is the most common reason private investors lose the exclusion. Someone holding a freelance permit for a consulting practice is conducting a licensed business; their investment portfolio nonetheless stays a personal investment, provided the portfolio itself is not run through that licence.

The second test: commerciality

Decree-Law 50/2022, the Commercial Transactions Law, determines which activity counts as commercial.Systematic buying for resale, brokerage and a range of other operations qualify as commercial whether or not a licence is held.

The practical consequence: active speculative trading can be treated as a commercial business and leave the exclusion even without a licence. The line between investing and trading is not drawn in the law by a number of transactions — it is assessed on the whole of the circumstances.

The two exclusions side by side

Feature	Personal investment	Real estate investment
Provision	arts. 1 and 2(2)(b) of Decision 49/2023	arts. 1 and 2(2)(c) of Decision 49/2023
Licence test	yes	yes
Commerciality test under Decree-Law 50/2022	yes	no
Territory	not limited by the provision	the UAE, and per CTGREI1 outside it as well
List of activities	open (“investment activity”)	closed: sale, lease, sub-lease
Dedicated FTA guide	none	CTGREI1, October 2024

The asymmetry in the commerciality row matters in practice: the real estate exclusion contains no commerciality test, while the personal investment exclusion does. In that one respect the real estate exclusion is the wider of the two, even though its list of activities is closed.

What happens when the exclusion is lost

Where income stops qualifying for an exclusion, it enters turnover in full from the moment it stopped qualifying, not from the date the FTA discovers the fact.

Article 51(3) of Decree-Law 47/2022: the FTA may, at its discretion and on the basis of the information available to it, register a person for corporate tax with effect from the date that person became a taxable person.

Example 4 of CTGRNP1 shows the mechanics: turnover was exceeded in 2025 and no registration was filed — the FTA may register the person for the 2025 tax period and issue a tax assessment. The right to appeal against that assessment survives.

For those structuring personal assets through a foundation, the transparency regime for family foundations deserves separate attention — we covered it in our article on the UAE family foundation and article 17.

The rates: 0% up to AED 375,000 and 9% above

Article 3(1) of Decree-Law 47/2022 sets two rates: 0% on the portion of taxable income not exceeding an amount specified by Cabinet decision, and 9% on the excess.

The amount is set by Cabinet Decision No. 116 of 2022 — 2022, not 2023, as it is frequently miscited. It was issued on 30 December 2022 and published in Official Gazette No. 743 of 16 January 2023.

The commencement date needs a caveat. Article 5 of the decision itself provides that it comes into force fifteen days after publication, that is, at the end of January 2023. The UAE legislation portal shows 30 December 2022 in its “Effective Date” field — the same date as issuance. The conflict resolves in favour of the text of article 5: a metadata field on a portal is not the rule. In practice the difference is immaterial, since Law 47/2022 applies only to tax periods commencing on or after 1 June 2023.

Article 2(1) of Decision 116/2022: the 0% rate applies to taxable income up to AED 375,000, irrespective of whether the taxable person conducts multiple businesses or business activities in that tax period.

The FTA cites the act the same way: footnote 19 to section 3.11 of CTGTNP1 refers to “Article 3 of the Corporate Tax Law and Articles 2(1) and 3 of Cabinet Decision No. 116 of 2022”.

The AED 375,000 band is one per person, not one per business

Section 3.11 of CTGTNP1: the rates apply to the total taxable income of the natural person, not to the income of each business separately.

So three businesses each earning AED 200,000 produce combined profit of AED 600,000: AED 375,000 is taxed at 0% and AED 225,000 at 9%. The tax is AED 20,250.

Artificial separation of a business

Article 2(2) of Cabinet Decision 116/2022: where persons have artificially separated their business so that the aggregate amount taxed at 0% exceeds AED 375,000, this is treated as an arrangement to obtain a corporate tax advantage under article 50 of Decree-Law 47/2022.

Article 50 is the general anti-abuse rule. Applying it lets the FTA recompute the tax consequences as though the separation had not happened.

Article 2(3) of the same decision: in making that assessment the FTA considers whether the arrangement had a valid commercial purpose and whether the persons carry on substantially the same business.

The calculation at three levels of turnover

Measure	Scenario A	Scenario B	Scenario C
Turnover for the calendar year	AED 900,000	AED 1,400,000	AED 4,000,000
Obliged to register	no	yes	yes
Costs	AED 500,000	AED 900,000	AED 2,600,000
Taxable income	—	AED 500,000	AED 1,400,000
Income taxed at 0%	—	AED 375,000	AED 375,000
Income taxed at 9%	—	AED 125,000	AED 1,025,000
Tax payable	AED 0	AED 11,250	AED 92,250
Small Business Relief available	not applicable	yes, reducing the tax to AED 0	no, turnover exceeds AED 3,000,000

Scenario B carries the main practical lesson: just above the threshold the tax is usually token or nil, yet the duty to register and file arises in full.

The 15% rate does not apply to natural persons

Article 3(3) of Decree-Law 47/2022, inserted by Decree-Law 60/2023, imposes a top-up tax bringing the effective rate to 15% — but only for multinational enterprises. A natural person is not a multinational enterprise at any level of turnover.

The 0% rate for a Qualifying Free Zone Person under article 3(2) does not reach natural persons either: a QFZP is by definition a juridical person. A full treatment of the rates, the QFZP regime and Small Business Relief for companies is in our article on UAE corporate tax in 2026: rates, QFZP and Small Business Relief.

Small Business Relief: how a natural person reduces the tax to nil up to AED 3,000,000 of turnover

Article 21(1) of Decree-Law 47/2022: a taxable person that is a resident person may elect to be treated as not having derived any taxable income for a tax period.

Section 3.12 of CTGTNP1 confirms the point directly: Small Business Relief is available to a natural person. A natural person conducting business in the UAE is a resident person under article 11(3)(c).

The threshold and how long it lasts

Article 2(1) of Ministerial Decision No. 73 of 2023: the revenue threshold for Small Business Relief is AED 3,000,000 for each tax period — the relevant period and every previous one.

Ministerial Decision No. 131 of 2026, issued on 29 July 2026, replaced article 2(2) of Decision 73/2023 with the following text: the threshold applies to tax periods commencing on or after 1 June 2023 and continues to apply to subsequent tax periods that end on or before 31 December 2029.

That is an extension: as originally drafted, the threshold ran only to tax periods ending on or before 31 December 2026. For a natural person on a calendar-year tax period it means the relief is available for 2024, 2025, 2026, 2027, 2028 and 2029.

The conditions that have to be met

Condition	Provision	What it means for a natural person
Be a resident person	art. 21(1) of Law 47/2022	met automatically where business is conducted in the UAE
Revenue not above AED 3,000,000 in the current period	art. 2(1) of Decision 73/2023	for a natural person, revenue equals turnover
Revenue not above AED 3,000,000 in any previous period	art. 2(3) of Decision 73/2023	a single breach closes the relief permanently
Not a constituent company of a multinational enterprise group	art. 3(1) of Decision 73/2023	cannot apply to a natural person
Not a Qualifying Free Zone Person	art. 3(2) of Decision 73/2023	cannot apply to a natural person
Revenue determined under the applicable accounting standards	art. 2(4) of Decision 73/2023	IFRS or IFRS for SMEs

Article 2(3) of Decision 73/2023 is the hardest condition: a taxable person cannot elect the relief if revenue in any relevant or previous tax period has exceeded the threshold. Crossing AED 3,000,000 in 2025 closes the relief for 2026 and every year after it, even if turnover falls back.

What stops applying once the relief is elected

Article 21(2) of Decree-Law 47/2022: where the relief applies, the provisions on exempt income (chapter 7), reliefs (chapter 8), deductions (chapter 9), tax loss relief (chapter 11) and article 55 on transfer pricing documentation do not apply.

Article 4 of Decision 73/2023: tax losses incurred in a period in which the relief was elected cannot be carried forward. Losses from earlier periods in which it was not elected may be carried forward to later periods in which it is again not elected.

Article 5 of Decision 73/2023 lays down the same rule for net interest expenditure.

What the relief does not remove

Section 3.3.1 of CTGRNP1: eligibility for Small Business Relief does not affect the obligation to register. That obligation arises as soon as turnover exceeds AED 1,000,000; the election is made later, in the return for the relevant tax period.

Article 6 of Decision 73/2023 repeats the anti-fragmentation construction: where the FTA establishes that persons have artificially separated a business and combined revenue exceeds AED 3,000,000, this is treated as an arrangement to obtain a tax advantage under article 50(1).

Article 21(3) of the Law: the FTA may take the measures necessary to verify compliance with the conditions and request any relevant information or records within the timeline it prescribes.

A caution about the FTA guide on this relief

FTA guide CTGSBR1, “Small Business Relief”, was published in August 2023, is the first and only version, and contains a section headed “Restriction to Tax Periods ending on or before 31 December 2026”.

That date no longer holds: Ministerial Decision No. 131 of 2026 extended the threshold to periods ending on or before 31 December 2029. The guide remains useful on the mechanics of the election, but it cannot be relied on for how long the relief runs — that part is out of date.

A detailed treatment of how the relief works for companies is in our separate article on Small Business Relief in the UAE.

Registration: the 31 March deadline and how it is counted

FTA Decision No. 3 of 2024 sets the deadlines for filing a registration application. It was issued on 22 February 2024 and came into force on 1 March 2024.

Article 5 of Decision 3/2024 contains two rules for natural persons:

Category	Condition	Application deadline
Resident natural person	conducts business during the 2024 Gregorian calendar year or subsequent years, and total turnover for a Gregorian calendar year exceeds the threshold	31 March of the subsequent Gregorian calendar year
No­n-re­sident natural person	conducts business during the 2024 Gregorian calendar year or subsequent years, and total turnover exceeds the threshold	3 months from the date of meeting the requirements of being subject to tax

The exact wording of article 5 names no figure: it refers to total turnover exceeding “the threshold specified in the relevant tax legislation”. The AED 1,000,000 itself comes from article 2(1) of Cabinet Decision 49/2023. The two acts work only together.

Article 6 of Decision 3/2024: failure to submit a tax registration application within the timeframe set by the FTA attracts an administrative penalty under Cabinet Decision No. 75 of 2023.

How the deadline works out year by year

The deadline is tied to the calendar year in which the threshold was crossed, not to the date within that year.Crossing on 5 January and crossing on 28 December of the same year produce the same registration deadline.

Year the threshold was crossed	Register by	File and pay by
2024	31 March 2025	30 September 2025
2025	31 March 2026	30 September 2026
2026	31 March 2027	30 September 2027
2027	31 March 2028	30 September 2028

The FTA press release of 28 January 2025 confirms the mechanics with a worked example: a person whose turnover exceeded AED 1,000,000 by 31 July 2024 had to register by 31 March 2025 and file by 30 September 2025.

The 2025 row is highlighted for a reason: 30 September 2026 is the next deadline to fall due as this article is published.

Where and how to register

Applications are filed through the EmaraTax portal. Section 4.1 of CTGRNP1: a natural person already registered for VAT or excise tax uses their existing login details; a person who has never registered with the FTA creates new credentials.

The FTA press release of 28 January 2025 additionally names the Tas’heel government service centres as a filing channel.

Section 4.2.1 of CTGRNP1: the FTA aims to review an application and respond within 20 business days of receiving a complete submission. Where additional information is requested, a fresh 20 business days runs from the date it is received. If the additional information is not supplied within the time the FTA specifies, the application is rejected and a new one must be filed.

What has to be attached

Table 1 of CTGRNP1 separates mandatory from optional items:

Document or information	Status
Contact details: telephone, physical address, email	mandatory
Passport (copy of the photo page)	mandatory
Emirates ID (copy of front and back)	mandatory if applicable
Sole establishment and licence details, if any	not mandatory
VAT or excise tax registration details	not mandatory
Bank account details	not mandatory

Section 5.1 of CTGRNP1: the corporate tax registration number is issued separately from the VAT and excise numbers; it will resemble the existing one, but the last digit will differ.

The practical point: holding a licence is not a precondition of corporate tax registration. The obligation follows from conducting a business and crossing the threshold, not from possession of a document. Where the activity is licensed, it is worth checking the format of the permission first — for instance, the UAE freelance visa and Green Visa.

The tax period of a natural person: why it is always the calendar year

Section 3.3.2 of CTGRNP1: the tax period of a natural person conducting a business or business activity subject to corporate tax is the Gregorian calendar year, running from 1 January to 31 December.

This is the key difference from companies. Article 57(1) of Decree-Law 47/2022 defines the tax period as the financial year, and article 57(2) defines the financial year as the Gregorian calendar year or the twelve-month period for which the taxable person prepares financial statements. A company has a choice; a natural person does not, because the turnover threshold in Decision 49/2023 is tied to the calendar year.

The first tax period

Section 3.3.2 of CTGRNP1: the first possible tax period for a natural person is the 2024 Gregorian calendar year.

The example in the same section: a person who started a business on 1 October 2024 assesses whether the AED 1,000,000 threshold was crossed as at 31 December 2024. If it was, the first tax period runs from 1 January to 31 December 2024 — not from 1 October — and the return is due before the end of September 2025.

Note the construction: the tax period begins on 1 January even where the business began in October. The period is not truncated by the date trading started.

Why there is no 2023 period

Article 69 of Decree-Law 47/2022: the law applies to tax periods commencing on or after 1 June 2023.

The 2023 calendar year began on 1 January 2023 — before 1 June 2023 — so it cannot be the tax period of a natural person. The first calendar year to begin wholly after that date is 2024. That is where the rule on the first possible period comes from.

The practical consequence: turnover in 2023 creates no corporate tax obligations for a natural person, whatever the amount.

Changing the tax period

Article 58 of Decree-Law 47/2022 allows a taxable person to apply to the FTA to change the start and end dates of the tax period, or to use a different one.

For a natural person this has no practical value: the AED 1,000,000 threshold in Decision 49/2023 is assessed by reference to the Gregorian calendar year in any event. Changing the period would not move the moment the registration obligation arises.

Calendar year against financial year: a summary

Feature	Natural person	Juridical person
Tax period	always the calendar year	the financial year, by choice
First possible period	the 2024 calendar year	a period commencing on or after 01.06.2023
Period truncated when trading starts mid-year	no	yes, the first period runs from incorporation
Registration threshold	AED 1,000,000 of turnover in a calendar year	registration is mandatory regardless of turnover
Registration deadline	31 March of the following year	by the categories in FTA Decision 3/2024

The last row is the most common misconception: companies register regardless of turnover, natural persons only once the threshold is crossed. Conflating the two regimes produces unnecessary registrations that cannot later be undone. How the tax period interacts with tax residence status is covered in our guide to personal tax residency in the UAE.

Filing and payment: nine months, and one return for everything

Article 48 of Decree-Law 47/2022: a taxable person must settle the corporate tax payable within 9 months from the end of the relevant tax period, or by such other date as determined by the FTA.

Article 53(1) of Decree-Law 47/2022: a taxable person must file a tax return in the form and manner prescribed by the FTA no later than 9 months from the end of the relevant tax period, or by such other date as directed by the FTA.

The two deadlines coincide: for a calendar-year tax period that is 30 September of the following year. There is no separate, earlier deadline for the return.

One return covers every business

Section 6.5 of CTGTNP1: a natural person files a single tax return covering all of their businesses. Separate returns per project are neither filed nor contemplated.

Section 6.1 of the same guide: a natural person holds only one tax registration number for all their businesses.Starting a new line of activity requires no fresh registration — the same TRN is used.

The nil return is compulsory

Section 6.5 of CTGTNP1: where turnover in a subsequent tax period does not exceed AED 1,000,000, a nil return is still required within 9 months of the end of that period.

Section 6.1 of the same guide states the trap rule: once registered, falling below AED 1,000,000 does not permit deregistration. The filing obligation survives until the business ceases entirely.

The practical consequence: registration is a one-way door. A single year at AED 1,100,000 creates an obligation that outlives subsequent years at AED 200,000.

What the return contains

Article 53(2) of Decree-Law 47/2022 sets the minimum content: the tax period to which the return relates; the name, address and tax registration number of the taxable person; the date of submission; the accounting basis used in the financial statements; the taxable income for the period; the amount of tax loss relief claimed under article 37(1); and further items.

The accounting basis line matters: it records whether the accrual or the cash basis was used, and it has to be consistent with eligibility for the cash basis under Ministerial Decision 114/2023.

The deadlines for a natural person, in one place

Obligation	Deadline	Provision
Registration application	31 March of the following year	FTA Decision 3/2024, art. 5
Filing the return	9 months from the end of the period	Law 47/2022, art. 53(1)
Paying the tax	9 months from the end of the period	Law 47/2022, art. 48
Return that secures the late­-regi­stration penalty waiver	7 months from the end of the firstperiod	FTA Public Clarification CTP006
Notifying the FTA of a change of registration details	20 business days	Cabinet Decision 74/2023, art. 6(4)
Dere­gistra­tion application	3 months from cessation of the business	FTA Decision 6/2023, art. 2(1)
Record retention	7 years after the end of the period	Law 47/2022, art. 56(1)

What exactly has to be notified within 20 business days

Article 6(4) of Cabinet Decision No. 74 of 2023 lists the changes a registrant must notify to the FTA within twenty business days: name, address and email address; trade licence activities; legal entity type, the partnership agreement for unincorporated partnerships and the articles of association or equivalent; the nature of the business; and the address from which any business is conducted.

Note that a telephone number is not in that list, while trade licence activities and the address the business is actually run from are. A change in the activity profile is a notifiable event on the same footing as a change of address.

The FTA learns about the licence without your involvement

Article 7 of Cabinet Decision 74/2023: government entities that grant licences to persons carrying out business must notify the FTA within twenty business days of the issuance or renewal of the licence.

The notification includes the name of the licensee, the type, number and date of issuance of the trade licence, the registered address, a description of the business activities and the details of the owners, partners and directors.

The practical consequence: assuming the FTA will not learn of a licensed activity has no basis — the data reaches it from the licensing authority automatically.

Where a VAT obligation arises alongside corporate tax — and above AED 375,000 of turnover it often does — the deadlines and thresholds of the two regimes do not line up: our full guide to UAE VAT sets out that separate picture.

Accounting, reporting and audit: where the FTA guide has fallen behind

Section 6.4 of CTGTNP1 sets out the accounting requirements for a natural person. One of them changed in 2025, and the guide does not know it.

Accounting standards

Article 4(1) of Ministerial Decision No. 114 of 2023: a taxable person shall apply International Financial Reporting Standards (IFRS).

Article 4(2) of the same decision: a taxable person deriving revenue not exceeding AED 50,000,000 may apply IFRS for small and medium-sized entities (IFRS for SMEs).

Article 2 of Ministerial Decision 114/2023: a person may prepare financial statements on the cash basis in two cases — where revenue does not exceed AED 3,000,000, or in exceptional circumstances on application to the FTA.

Section 6.4 of CTGTNP1 adds the practical detail: the financial statements of a natural person are standalone and aggregate all of their businesses. One set of statements per person, not one per project.

Audit: the rule changed on 1 January 2025

Ministerial Decision No. 82 of 2023 required audited financial statements where revenue exceeded AED 50,000,000. It has been repealed by Ministerial Decision No. 84 of 2025.

Article 3 of Ministerial Decision 84/2025: Ministerial Decision No. 82 of 2023 is repealed but shall continue to apply to tax periods that commenced before 1 January 2025.

Article 4 of Ministerial Decision 84/2025: this decision applies to tax periods commencing on or after 1 January 2025. It was issued on 25 March 2025 and took effect on the date of issuance.

Tax period of the natural person	Which act applies	Audit threshold
the 2024 calendar year	Ministerial Decision 82/2023	revenue above AED 50,000,000
the 2025 calendar year onwards	Ministerial Decision 84/2025	revenue above AED 50,000,000

The threshold is unchanged at AED 50,000,000 — but the governing provision is a different one, and that is not a formality. Citing the repealed decision in a 2025 filing or in correspondence with the FTA is citing a rule that is no longer in force.

Article 2(1)(a) of Ministerial Decision 84/2025: the duty to prepare and maintain audited financial statements falls on a taxable person that is not a tax group and derives revenue exceeding AED 50,000,000 during the relevant tax period.

Article 2(1)(b) extends the duty to a Qualifying Free Zone Person regardless of revenue — which cannot apply to a natural person.

Record retention

Article 56(1) of Decree-Law 47/2022: a taxable person must maintain all records and documents for 7 years following the end of the tax period to which they relate.

The provision states two purposes: the records must support the information provided in a return or any other document filed, and enable the FTA readily to ascertain the taxable person’s taxable income.

Section 5.2 of CTGRNP1 confirms the seven-year period as it applies to a natural person.

The language requirement

Item 2 of the table in Cabinet Decision No. 75 of 2023: failure to submit records in Arabic when the FTA requests them attracts a penalty of AED 5,000.

This is not a duty to keep the books in Arabic — it is a duty to produce a translation on request. Records may be kept in any language; the exposure arises at the moment of the request.

How audit works on the company side, and where lower thresholds in particular free zones make it mandatory anyway, is covered in our article on corporate audit requirements in the UAE.

Deductions: how the computation differs from a company’s

The general rules for determining taxable income in chapter 6 and the deduction rules in chapter 9 of Decree-Law 47/2022 apply to a natural person exactly as they apply to a company. One rule, however, does not — and it changes the arithmetic.

The interest limitation rule does not apply

Article 30(6)(c) of Decree-Law 47/2022: clauses 1 to 5 of that article do not apply to a natural person undertaking a business or business activity in the State. The only other entries on that list of exclusions are banks and insurance providers. Section 4.1 of CTGTNP1 confirms the point expressly.

For every other taxable person, articles 30(1) and 30(3) together with article 8 of Ministerial Decision No. 126 of 2023 cap the deduction of net interest expenditure at the higher of AED 12,000,000 or 30% of EBITDA. For a natural person there is no such cap.

Example 20 of CTGTNP1 puts numbers on it: with EBITDA of AED 30,000,000 and interest expenditure of AED 15,000,000, the expense exceeds both 30% of EBITDA (AED 9,000,000) and the AED 12,000,000 de minimis — and is still fully deductible.

The condition remains: interest is fully deductible where the expenditure is incurred wholly and exclusively for the purposes of the business and meets the arm’s length standard.

The practical consequence: a natural person funding their business with debt is in a better position than a company with the same funding structure. It is one of the few advantages the natural-person regime carries.

An important boundary: the specific rule in article 31 does apply to a natural person. It disallows interest on a loan obtained, directly or indirectly, from a related party to fund a dividend or profit distribution to a related party, a redemption or return of share capital, a capital contribution to a related party, or the acquisition of an ownership interest in a person who becomes a related party. Article 31(2) leaves a defence: the deduction survives where the taxable person can demonstrate that the main purpose of the loan and the transaction was not to gain a corporate tax advantage.

What is deductible and what is not

Item	Provision	Rule
Expenditure incurred wholly for the business	art. 28	fully deductible
Interest on borrowings	arts. 29, 30	for a natural person, uncapped by art. 30
Entertainment expenditure	art. 32	deductible at 50%
Fines and penalties, other than compensation for breach of contract	art. 33	not deductible
Bribes and other illicit payments	art. 33	not deductible
Donations to non-qua­li­fying recipients	art. 33	not deductible
Corporate tax itself	art. 33	not deductible
Tax paid outside the UAE	art. 33	not deductible
Recoverable input VAT	art. 33(7)	not deductible
Dividends and distributions to an owner of the taxable person	art. 33(4)	not deductible
Amounts withdrawn from the business by a natural person	art. 33(5)	not deductible, even if described as a salary
Expenditure of a personal nature	art. 28	not deductible

The personal expenditure line is the central one for a natural person. Separating private spending from business spending is a matter of self-assessment, and it is the first thing examined in a tax audit.

Drawings from the business are never deductible

Article 33(5) of Decree-Law 47/2022: no deduction is allowed for amounts withdrawn from the business by a natural person who is a taxable person under article 11(3)(c), or by a partner in an unincorporated partnership.

Section 4.3 of CTGTNP1 puts the rule in plain terms: amounts withdrawn by a natural person from their sole proprietorship business — even if described as a wage or salary — cannot be deducted in calculating the taxable income arising from that business.

Example 21 of the same guide: a proprietor withdrew AED 200,000 in the tax period ended 31 December 2025 and recorded it in the business accounts as an annual salary for running the business. No deduction is allowed, because the natural person and the sole proprietorship are one and the same taxable person, and it makes no difference that the salary would have been at arm’s length.

This is the most underrated rule in the computation: paying yourself a salary out of your own business does not reduce the tax base, and claiming it in a return exposes you to the incorrect-return penalty at item 9 of the table in Cabinet Decision 75/2023.

The arm’s length principle

Article 34 of Decree-Law 47/2022 reaches a natural person too: transactions with related parties must be on arm’s length terms.

Section 4.3.2 of CTGREI1 gives two characteristic examples for a natural person: leases with related parties and property management agreements. Letting an apartment to a relative at a token rent produces no tax saving — the computation is made at the market rate.

Article 35(1)(a): two or more natural persons are related parties where they are related within the fourth degree of kinship or affiliation, including by way of adoption or guardianship.

Section 4.4.1 of CTGTNP1 explains how the degrees are counted, by reference to article 79 of the Civil Transactions Law: a relative of one spouse is treated as being of the same degree in relation to the other spouse, and husband and wife are in a relationship of the first degree of affiliation. First degree covers spouses, parents and children, and the parents and children of a spouse; second degree covers grandparents, grandchildren and siblings.

Article 35(1)(b) adds the vertical dimension: a natural person and a juridical person are related parties where the natural person, alone or together with their related parties, directly or indirectly owns a 50% or greater interest in the juridical person or controls it. For an entrepreneur who also owns a company, that means every dealing between the two must be on arm’s length terms.

Connected persons: a natural person barely has any

Article 36 limits the deduction of a payment or benefit provided by a taxable person to a connected person to its market value; anything above that is not deductible. The rule bites only on the payer, not the recipient.

Section 4.5 of CTGTNP1: a connected person is an owner, director or officer of the taxable person, or a related party of any of them — and a taxable person who is a natural person has no owner, director or officer, because those are concepts of juridical persons.

The one limb of the definition that reaches a natural person: partners in the same unincorporated partnership are connected persons of each other, and of the other partners’ related parties, such as relevant family members.

Losses

Article 37 of Decree-Law 47/2022 allows a tax loss to be carried forward, reducing taxable income by no more than 75% in each period.

Article 39 restricts carry-forward on a change of ownership; for a natural person that restriction has no practical bite, since the owner of the business does not change without the business itself ceasing.

An important interaction with Small Business Relief: losses of a period in which the relief was elected cannot be carried forward at all. That follows directly from article 4 of Ministerial Decision 73/2023, and it is the main reason a loss-making year is sometimes better spent outside the relief.

A further layer of requirements on source documents arrives with mandatory e-invoicing — the transition is set out in our article on mandatory electronic invoicing in the UAE.

Penalties: the full table in Cabinet Decision 75/2023

Cabinet Decision No. 75 of 2023 on administrative penalties for violations related to the application of Decree-Law 47/2022 was issued on 10 July 2023, came into force on 1 August 2023 and was published in Official Gazette No. 756 of 31 July 2023. It is in force with one amendment, made by Cabinet Decision No. 10 of 2024.

The penalties that reach a natural person

Violation	Penalty
Failure to keep the required records and documents	AED 10,000; AED 20,000 on a repeat within 24 months
Failure to submit records in Arabic when the FTA requests them	AED 5,000
Failure to submit a tax registration application within the FTA’s timeframe	AED 10,000
Failure to submit a dere­gistra­tion application on time	AED 1,000 per month of delay, capped at AED 10,000
Failure to notify the FTA of a case requiring amendment of registration details	AED 1,000 per violation, AED 5,000 on a repeat within 24 months
Late filing of the tax return	AED 500 for each of the first 12 months; AED 1,000 for each month from the 13th
Failure to pay the tax on time	14% per annum, applied monthly on the unpaid payable tax
Incorrect tax return	AED 500, unless corrected before the filing deadline expires
Voluntary disclosure of an error	1% per month of the tax difference
Failure to make a voluntary disclosure before a tax audit	15% fixed on the tax difference plus 1% per month
Failure to facilitate a tax audit	AED 20,000
Late filing of an exempt person’s declaration	AED 500 or AED 1,000 per month on the same scale
Failure of a legal repre­senta­tive to notify their appointment in time	AED 1,000, payable from the repre­senta­tive’s own funds
Failure of a legal repre­senta­tive to file the return in time	AED 500 or AED 1,000 per month, from the repre­senta­tive’s own funds

The late registration penalty of AED 10,000 sits at item 14 of the table in Decision 75/2023 and is the penalty natural persons meet most often. It is unrelated to the amount of tax and is charged even where the tax payable is nil.

One detail of the amendment chain matters: item 14 was not in the original text of Decision 75/2023. It was inserted by Cabinet Decision No. 10 of 2024, issued on 22 February 2024 and in force from 1 March 2024. A footnote to that effect appears in the consolidated text published by the FTA.

That date coincides with the commencement of FTA Decision 3/2024 on registration timelines — the deadline and its sanction were introduced together. Before 1 March 2024 there was no penalty specifically for late corporate tax registration.

The last two rows of the table concern the legal representative — that is, the case of a minor or incapacitated taxpayer. Those penalties are collected from the representative’s own funds, not the taxpayer’s.

How the late payment penalty is computed

The 14% annual rate is applied monthly to the unpaid amount of payable tax. Time runs from the day after the payment deadline.

For voluntary disclosures and tax assessments the decision sets a special starting point — 20 business days from the date the disclosure is filed or the assessment received.

Article 3 of Decision 75/2023 sets the mechanics for the monthly penalties in items 3, 6, 7, 8 and 13: where a month has no date corresponding to the date of the first imposition, the penalty is treated as imposed on the last day of that month, while in every other month it falls on the same date as the first imposition.

The arithmetic in a worked example

A natural person crossed the threshold in 2025, did not register, filed the return five months late, and paid tax of AED 40,000 five months after the due date.

Component	Calculation	Amount
Late registration penalty	fixed	AED 10,000
Late filing penalty	AED 500 × 5 months	AED 2,500
Late payment penalty	AED 40,000 × 14% × 5/12	about AED 2,333
Total on top of the tax	about AED 14,833

The late registration penalty accounts for two-thirds of the total exposure in this calculation — and it is the one component that can be removed entirely, through the mechanism described in the next section.

The appeal route against assessments, the mechanics of voluntary disclosure and the deadlines for objections are set out separately in our article on UAE tax penalties, voluntary disclosure and appeals.

Waiving the AED 10,000 penalty: the CTP006 mechanism

FTA Public Clarification CTP006, “Waiver of Administrative Penalty for failing to submit a Corporate Tax registration application within a specified deadline”, describes a mechanism that removes the late registration penalty entirely — and refunds it where it has already been paid.

The Cabinet approved that the FTA may waive the late registration penalty and refund it where it has been paid.

The Cabinet approval takes effect from 14 April 2025 and applies to any corporate tax late registration penalty from 1 June 2023 onwards.

The single condition

File the tax return for the first tax period within seven months of the end of that period, instead of nine.

For exempt persons the equivalent condition is to file the annual declaration within seven months of the end of the first financial year.

That condition, and nothing else — no application, petition or justification. The mechanism is automatic.

What the waiver actually delivers

Position when the return is filed	Outcome
Penalty imposed but unpaid	the penalty is cancelled
Penalty already paid	AED 10,000 is credited to the corporate tax account in EmaraTax
A reco­nside­ration request is pending	the request is cancelled and the waiver applies automatically

The refund arrives as a credit to the taxpayer’s corporate tax account in EmaraTax, not as a bank transfer.

Three limits worth understanding

First: the mechanism applies only to the first tax period — whether past or future. A late registration surfacing in the second or third period is not covered.

Second: the mechanism does not change the payment deadline. The tax remains payable within nine months. Filing early, in the seventh month, does not bring the payment date forward.

Third: the waiver covers only the late registration penalty. Penalties for late filing, late payment, an incorrect return and everything else remain in full.

Who is within the class of beneficiaries

CTP006 expressly lists among the beneficiaries a person — natural, juridical or other — who is required to file a tax return. Natural persons are named first in the text of the clarification.

The clarification also extends the mechanism to persons who registered and then formed or joined a tax group; to qualifying public benefit entities listed in Cabinet Decision No. 37 of 2023; and to exempt persons under article 4(1)(f) to (i) of Decree-Law 47/2022.

The calendar for a natural person

First tax period	Ordinary filing deadline	Deadline for the waiver
the 2024 calendar year	30 September 2025	31 July 2025 — passed
the 2025 calendar year	30 September 2026	31 July 2026 — passed
the 2026 calendar year	30 September 2027	31 July 2027
the 2027 calendar year	30 September 2028	31 July 2028

For anyone whose first tax period was 2024 or 2025, the seven-month window has already closed as this article is published. The CTP006 waiver is not available to them, and the ordinary route of objection and reconsideration remains.

For anyone whose first period is 2026, the 31 July 2027 date is still ahead, and filing by then removes the AED 10,000 penalty in full.

If the seven-month window has been missed

The ordinary route remains: a request for reconsideration and a tax assessment review request under Federal Decree-Law No. 28 of 2022 on Tax Procedures.

FTA Decision No. 1 of 2025, issued on 17 February 2025 and in force from 1 March 2025, lists the cases in which the FTA may extend the deadline for accepting such requests: an accident or serious illness of the authorised signatory; the death of the authorised signatory, including the legal representative, or of a first- or second-degree family member; a temporary business disruption beyond the person’s control; damage to records due to a disaster; a general malfunction in the FTA’s systems; a sudden discontinuation of the business or of business records due to the installation of a new computer system; an FTA request for additional documents where the taxpayer can prove they could not be obtained within the prescribed deadlines; and force majeure at the FTA’s discretion.

Article 2 of the same decision lists the grounds on which an extension is refused outright: the taxpayer being unaware of their obligations; delay caused by the negligence of a third party the taxpayer relied on, including a tax agent or legal representative; complexity of the subject matter of the request; and the applicant being busy running their business.

The first and fourth of those refusal grounds close off precisely the explanations a natural person who missed the registration deadline most often offers.

What else has changed in UAE tax legislation over the past year — including the adjacent FTA clarifications — is collected in our review of what changed in UAE tax legislation from 1 April 2026.

What does not apply to natural persons: four regimes borrowed by mistake

Half the errors in published commentary on corporate tax for natural persons come from importing rules written for other categories of taxpayer. Here are the four most frequent.

The FTA Decision 7/2024 postponement does not reach natural persons

FTA Decision No. 7 of 2024, issued on 25 September 2024, moved the filing and payment deadline to 31 December 2024.

But articles 2(1) and 2(2) of that decision impose two cumulative conditions: the taxable person was incorporated, established or recognised under the applicable legislation of the State on or after 1 June 2023, and its tax period ended on or before 29 February 2024.

A natural person can meet neither. A natural person is not “incorporated, established or recognised under the legislation of the State”, and their first tax period ends on 31 December 2024 — after 29 February 2024.

FTA Decision 12/2026 is Pillar Two, not natural-person registration

The file name of FTA Decision No. 12 of 2026 carries the words “on registration and deregistration timelines”, which is why it is regularly mistaken for a replacement of Decision 3/2024.

In fact FTA Decision 12/2026, issued on 16 July 2026, governs registration for top-up tax purposes under Cabinet Decision No. 142 of 2024 and applies to financial years commencing on or after 1 January 2025.

It neither amends nor repeals FTA Decision 3/2024. The 31 March deadline for natural persons stands as before.

A VAT Designated Zone and a corporate tax Qualifying Free Zone Person are different things

Feature	Designated Zone (VAT)	Qualifying Free Zone Person (corporate tax)
Provision	Decree-Law 8/2017 on VAT and Cabinet Decision 59/2017	art. 18 of Decree-Law 47/2022 and Cabinet Decision 100/2023
What is determined	a territory treated as outside the UAE for VAT purposes	the status of a person, giving 0% on qualifying income
What holds the status	the zone	the person
Available to a natural person	not applicable	no, a QFZP is a juridical person
Automatic	a zone is listed by Cabinet decision	the status requires the conditions to be met each period

Being in a Designated Zone does not deliver a 0% corporate tax rate, and QFZP status does not relieve anyone of VAT. They are two independent regimes with different provisions and different lists.

The exemptions in Cabinet Decision 55/2025 do not touch natural persons

Cabinet Decision No. 55 of 2025, issued on 2 May 2025 and effective retrospectively from 1 June 2023, exempts from corporate tax a taxable person established under the legislation of another country and wholly owned or controlled by an exempt person under paragraphs (a), (b), (f) and (g) of article 4(1).

That is about government entities and qualifying funds, not individuals. As at September 2026 no Cabinet decision exempts natural persons from corporate tax beyond the three exclusions in Decision 49/2023.

Article 3 of Cabinet Decision 49/2023 permits the Minister to issue implementing resolutions. As at September 2026 no such resolution appears on the Ministry of Finance or FTA portals.

A separate question is what happens to these obligations when a licence is suspended: that is not a cessation of business, and the tax consequences of the two differ, as shown in our article on freezing a trade licence in the UAE.

Deregistration, cessation of business and death of the taxpayer

Article 52(1) of Decree-Law 47/2022: a person holding a tax registration number must file a deregistration application on cessation of their business or business activity — whether by dissolution, liquidation or otherwise — in the form, manner and within the timeline prescribed by the FTA.

Article 2(1) of FTA Decision No. 6 of 2023 fixes that timeline for a natural person: the application is filed within 3 months of the date of cessation of the business or business activity. The decision was issued on 7 April 2023 and came into force on 1 June 2023.

When deregistration is not available

Section 6.1 of CTGRNP1: a natural person should not file a deregistration application if any of their businesses is still active — even where combined turnover has fallen below AED 1,000,000.

The same section: a natural person holds only one tax registration number for all their businesses, and should deregister only once all activity has ceased.

Article 52(2) of Decree-Law 47/2022: a taxable person is not deregistered until all corporate tax and administrative penalties have been paid and all returns filed, including the return for the tax period up to and including the date of cessation.

Example 5 of CTGRNP1 illustrates the consequence: an application filed on 3 January 2026 after trading ceased on 31 December 2025, with the 2025 return outstanding — the FTA will not approve deregistration until that return is filed and the tax paid.

Restarting cancels the application

Article 6 of Cabinet Decision No. 74 of 2023: where a person has filed a deregistration application and then, in the same tax period, starts a new business after filing, the application ceases to be valid and the person remains registered.

The effective date of deregistration

Article 52(3) of Decree-Law 47/2022: on approval, the FTA deregisters the person with effect from the date of cessation or from such other date as it may determine.

Article 2(1) of FTA Decision 6/2023 says the same: the date of deregistration is the date the business ceased, unless the FTA determines otherwise.

Death of a natural person

Section 6.2.2 of CTGTNP1 and section 6.2 of CTGRNP1: on death, the natural person ceases to be a taxable person.

Outstanding liabilities are settled under article 42(1) of the Tax Procedures Law:

Stage	How settlement is made
Before the estate is distributed	the tax is settled from the elements of the estate or the income arising from them
After the estate is distributed	recourse is had against the heirs and legatees — each to the extent of their share in the estate
Exception	where a clearance certificate has been obtained from the FTA for the estate repre­senta­tive or any of the heirs

The practical lesson for heirs: the clearance certificate is worth requesting before the estate is distributed, not after.Once distributed, liability is spread across the heirs and agreement becomes harder.

The late deregistration penalty

Item 3 of the table in Cabinet Decision 75/2023: failure to submit a deregistration application on time attracts AED 1,000 per month of delay, capped at AED 10,000.

It is the only penalty in the regime that accrues progressively against a hard ceiling — it reaches the maximum after ten months of delay.

The full closing-down procedure on the company side, including liquidation and licence cancellation, is set out in our article on liquidating and closing a UAE company.

Unincorporated partnerships: the partner’s share and Decision 63/2025

An unincorporated partnership is fiscally transparent by default: the partners, not the partnership, are the taxable persons.

Section 6.1 of CTGRNP1 and section 3.10 of CTGTNP1: a natural person who is a partner in a fiscally transparent partnership includes their distributive share of income in the turnover calculation alongside the revenue of their own business.

The practical consequence: a partner with a solo practice generating AED 600,000 and a partnership share of AED 500,000 has turnover of AED 1,100,000 and must register, even though neither source reaches the threshold on its own.

The partnership as a taxable person in its own right

Article 16(8) of Decree-Law 47/2022 allows the partners to apply to the FTA for the partnership to be treated as a taxable person in its own right.

Cabinet Decision No. 63 of 2025 sets out the consequences of that treatment. It was issued on 14 May 2025, published in Official Gazette No. 800 of 29 May 2025, and took effect retrospectively from 1 June 2023.

Article 2 of Decision 63/2025: where the FTA approves the partners’ application, the unincorporated partnership is considered a juridical resident person for the purposes of the Corporate Tax Law.

That changes the arithmetic for natural-person partners: once the partnership is itself the taxable person, the partner’s share stops being their own business income and drops out of their turnover.

The two structures side by side for a natural-person partner

Feature	Partnership fiscally transparent	Partnership a taxable person in its own right
Provision	art. 16(1)–(7) of Law 47/2022	art. 16(8) of Law 47/2022 and Cabinet Decision 63/2025
Who is the taxable person	each partner	the partnership
The partner’s share enters their turnover	yes	no
The AED 1,000,000 threshold applies to the partner	yes, including the share	yes, but excluding the share
Rate at partnership level	not applicable	9% above AED 375,000
The partner’s duty to register	arises on crossing the threshold	arises only on their own business

Note the retrospective commencement date of 1 June 2023: the treatment is available for the very first tax period of a natural person, that is, for 2024.

The election is made once and cannot be unwound

Ministerial Decision No. 261 of 2024, issued on 28 October 2024 and effective retrospectively from 1 June 2023, repealed Ministerial Decision No. 127 of 2023 and set the conditions for partnerships, foreign partnerships and family foundations.

Article 3(1) of Decision 261/2024: once the FTA approves the application for the partnership to be treated as a taxable person in its own right, that application is irrevocable, save in exceptional circumstances and with the FTA’s approval.

Section 6.3 of FTA guide CTGPTN1 states the consequence plainly: the partnership continues to be treated as a taxable person until it is dissolved or liquidated.

Section 6.1 of the same guide gives the effective date, under articles 16(8) and 16(10) of the Law: the beginning of the tax period in which the application was filed, the beginning of a future tax period, or any other date determined by the FTA.

An obligation that follows the change: section 6.4 of CTGPTN1 requires the FTA to be notified within 20 business days whenever a partner joins or leaves, and article 3(2) of Decision 261/2024 additionally requires the responsible partner to supply details of those changes when filing the tax return.

Example 18 of CTGPTN1 is built on a partnership of five natural persons whose application to become fiscally opaque the FTA approved — so the route is open to partnerships made up entirely of natural persons.

What does not change

The application is made by the partners and the decision is the FTA’s — there is no automatic transition. Until approval, the partnership stays transparent and the partner’s share counts in their turnover.

The AED 375,000 band at 0% is not doubled up across the two levels: in the transparent model it applies to each partner’s total taxable income, in the opaque model it applies at partnership level.

The artificial separation construction in article 2(2) of Cabinet Decision 116/2022 continues to apply: splitting what is substantially one business into a partnership and a solo practice in order to claim two bands is assessed under article 50.

The family foundation: a third route for a natural person

Section 5.4 of CTGTNP1: a natural person can set up a family foundation through a contractual trust, a private trust company, a foundation or a similar structure to hold and manage personal assets.

Where that structure is a juridical person under the applicable UAE legislation — the Federal Trust Law, for instance — it is a taxable person rather than a fiscally transparent entity, and the investment income of its founder, settlor or beneficiaries is taxed at the level of the foundation itself. Income received by a natural person as a beneficiary of such a foundation is not taxed again in their hands.

Article 17(1) of Decree-Law 47/2022 opens an alternative: a family foundation may apply to the FTA to be treated as an unincorporated partnership, that is, as fiscally transparent. One of the conditions is that the foundation conducts no activity that would have constituted a business or business activity under article 11(6) had it been undertaken directly by the founder, settlor or beneficiaries.

Where the application is approved, a natural-person beneficiary’s share is not taxable income in their hands — precisely because, by that condition, the foundation carries on no such activity.

Distinct from partnerships is the tax group regime, available only to juridical persons — its conditions, deadlines and traps are set out in our article on the UAE tax group.

The step-by-step algorithm: from testing the threshold to a filed return

Corporate tax for natural persons is a self-assessment regime. The FTA does not notify anyone that an obligation has arisen — the taxpayer determines it.

Step 1. Sort the income into four buckets

Break the whole calendar year’s income into wages, personal investment, real estate investment and business. The first three buckets do not enter the threshold calculation at all.

Test every item in the third bucket against the licence question: is a licence held, is one required, is the activity conducted through one. The second bucket carries the additional commerciality test under Decree-Law 50/2022.

Step 2. Add up the turnover in the fourth bucket

Add the gross revenue of every business plus the distributive share in any fiscally transparent partnership. On the accrual basis, unless the cash basis applies under Ministerial Decision 114/2023.

Compare the result with AED 1,000,000. Below it, there is no obligation and registration should not be filed. Above it, move to step 3.

Step 3. Register by 31 March

File through EmaraTax or a Tas’heel service centre. Contact details and a copy of the passport photo page are mandatory; the Emirates ID where applicable.

Allow 20 business days for review, and a further 20 business days from the date any additional information is supplied.

Step 4. Decide whether to elect Small Business Relief

Turnover in the period	Turnover in earlier periods	Decision
up to AED 3,000,000	never exceeded AED 3,000,000	available, usually worth electing
up to AED 3,000,000	exceeded AED 3,000,000 at least once	permanently unavailable
above AED 3,000,000	any	unavailable for this period
up to AED 3,000,000, but a loss-making year	never exceeded	weigh it up: losses under the relief cannot be carried forward

Step 5. Prepare the financial statements

One set of statements per person, aggregating every business. IFRS, or IFRS for SMEs where revenue is up to AED 50,000,000; the cash basis is available where revenue is up to AED 3,000,000.

An audit is required only where revenue exceeds AED 50,000,000 — under Ministerial Decision 84/2025 for periods from 2025 and under Ministerial Decision 82/2023 for the 2024 period.

Step 6. File the return and pay the tax

Within 9 months of the end of the calendar year. One return for every business. A nil return is compulsory where turnover has dropped below the threshold.

If this is your first tax period and a late registration penalty has been imposed, file within 7 months rather than 9 to secure the CTP006 waiver.

Step 7. Maintain the position

Event	Action	Deadline
Address, telephone or email changed	notify the FTA	20 business days
A new business started	nothing; the TRN is unchanged	—
Turnover fell below AED 1,000,000	file a nil return	9 months
All activity ceased	file a dere­gistra­tion application	3 months
The FTA requests records in Arabic	provide the translation	on request

All records are kept for 7 years after the end of the tax period to which they relate.

Where tax residence also has to be evidenced to claim treaty benefits, the certificate procedure is set out in our article on the UAE tax residency certificate.

Common mistakes and what each one costs

Eight mistakes, each with a measurable price.

Mistake 1. Testing the threshold against profit rather than turnover

The AED 1,000,000 threshold applies to gross revenue before any costs are deducted. Computing it on profit understates the figure and leads to a missed registration deadline.

The cost: AED 10,000 for late registration plus AED 500 for every month the return is late. Discovered a year later, that reaches around AED 16,000 with nil tax actually payable.

Mistake 2. Registering “just in case” below the threshold

Article 2(3) of Cabinet Decision 49/2023 expressly removes the registration duty, and the FTA’s own page advises against registering where there is no basis for it.

The cost: an annual nil return within 9 months of every period, with no route to deregistration until the business ceases entirely. Each of those nil returns costs AED 500 a month if it is late.

Mistake 3. Testing the threshold business by business

Section 3.3.1 of CTGRNP1: turnover is added across all of a natural person’s businesses and business activities.

The cost: missing the threshold across three projects at AED 400,000 each carries the same AED 10,000; and where the split is engineered deliberately, recharacterisation under article 50 with additional tax and voluntary disclosure penalties of 15% plus 1% a month.

Mistake 4. Running personal and business money through one account

Example 3 of CTGRNP1: dividends received through the business account enter turnover; the same dividends in a personal account do not.

The cost: in the guide’s own example this is what moves turnover from AED 900,000 to AED 1,400,000 — creating a registration obligation that need not have existed. The direct price is AED 10,000 plus 9% on profit above AED 375,000.

Mistake 5. Assuming that falling turnover ends the registration

Section 6.1 of CTGRNP1: once registered, a fall below AED 1,000,000 does not permit deregistration.

The cost: a deregistration application filed while the business is still active will not be approved, and simply stopping filing in the hope of automatic deregistration costs AED 500 a month for each missing return — up to AED 6,000 in the first year and AED 12,000 in each year after.

Mistake 6. Missing the seven-month window in the first period

CTP006 removes the AED 10,000 penalty in full where the return for the first tax period is filed within 7 months rather than 9.

The cost: the difference between 31 July and 30 September is exactly AED 10,000. Filing two months later brings no offsetting benefit: the payment deadline stays at nine months either way.

Mistake 7. Deducting a salary paid to yourself

Article 33(5) of Decree-Law 47/2022 expressly disallows any deduction for amounts withdrawn from the business by a natural-person taxable person or by a partner in an unincorporated partnership.

The cost: the drawing goes back into the tax base at 9%, plus AED 500 for an incorrect return under item 9 of the table in Cabinet Decision 75/2023 if it is not corrected before the filing deadline. On a AED 500,000 drawing that is AED 45,000 of tax and AED 500 of penalty — and correcting it later by voluntary disclosure adds 1% a month on the tax difference.

Mistake 8. Assuming a licensed managing agent destroys the real estate exclusion

Section 4.2.3 of CTGREI1: it is not relevant to the natural person that the agent or management company holds a licence; using an intermediary does not alter the nature of the income or to whom it belongs.

The cost here runs the other way — overpayment: an owner who wrongly concludes they are running a business registers with no basis for it and acquires a permanent filing obligation, nil returns included. It cannot be shed until the activity ceases entirely.

The cost of each mistake, in one place

Mistake	Direct cost	Provision
Threshold tested on profit	AED 10,000 + AED 500/month	Cabinet Decision 75/2023, items 14 and 7
Unnecessary registration	AED 500/month per late nil return	Cabinet Decision 75/2023, item 7
Threshold tested per business	AED 10,000; on artificial splits, assessment under art. 50	Cabinet Decision 116/2022, art. 2(2)
Mixed accounts	AED 10,000 + 9% tax	Guide CTGRNP1, example 3
Waiting for automatic dere­gistra­tion	up to AED 12,000 a year	Cabinet Decision 75/2023, item 7
Missing the seven-month window	AED 10,000	FTA Public Clarification CTP006
Deducting drawings from the business	9% tax on the drawing + AED 500	Law 47/2022, art. 33(5)
Registering because the managing agent is licensed	a permanent filing obligation	Guide CTGREI1, s. 4.2.3

Six of the eight trace back to one cause: applying to a natural person rules written for companies. It also pays to check the activity profile on the licence — how that feeds into tax status is set out in our article on UAE trade licence activities.

Who the regime suits, who it does not, and when to get advice

Corporate tax for natural persons is not a choice but a consequence of the facts. The structure of the activity, however, is a choice — and it drives the burden.

Where natural-person status usually works well

Profile	Why
A consultant or specialist with turnover up to AED 3,000,000	Small Business Relief reduces the tax to nil, with no cost of maintaining a company
A business funded with debt	the article 30 interest limitation does not apply to a natural person
A property owner holding no licence	the income sits wholly outside corporate tax, whatever the amount
A portfolio investor holding no licence	personal investment income sits outside corporate tax
An employee with a side project below AED 1,000,000	the salary does not enter turnover, the threshold is not met, no obligations arise

Where natural-person status usually does not work

Profile	Why
Turnover consistently above AED 3,000,000	Small Business Relief is unavailable and 9% applies with no alternative
Partners or investors are to be brought in	an equity interest in a natural person’s business cannot be documented
Free zone activity generating qualifying income	the 0% QFZP rate is available only to a juridical person
Limited liability is needed	a natural person answers for the business with all their assets
A sale of the business is planned	selling shares and selling the assets of a sole establishment have different consequences

When professional review is warranted

First: where income sits on the border between personal investment and business. The commerciality test under Decree-Law 50/2022 is not expressed as a number of transactions, and the line is drawn on the whole of the circumstances.

Second: where property is let under any document issued by a licensing authority. The difference between an Ejari registration and a Dubai DET holiday home licence changes the tax status of the entire income stream.

Third: where activity runs simultaneously through a natural person and a company. The artificial separation construction in article 50 applies, and the assessment turns on commercial purpose.

Fourth: where a double taxation agreement is in play. It is the treaty, and only the treaty, that can make a natural person a non-resident of the UAE for corporate tax purposes.

Fifth: where succession to the business is in prospect. The mechanics in article 42(1) of the Tax Procedures Law and the clearance certificate need planning in advance.

What is worth doing before the current tax period closes

Check turnover for the 2026 calendar year to date and assess the likelihood of crossing the threshold by 31 December.

If the threshold has already been crossed, put 31 March 2027 in the calendar as the registration deadline and have the passport and contact details ready.

If 2026 is the first tax period, also note 31 July 2027 as the date for filing within the seven-month window.

If turnover is approaching AED 3,000,000, weigh up whether to elect Small Business Relief in the current period, since a single breach closes the relief permanently.

Working through the structure for a specific situation — including the choice between operating as a natural person and incorporating — can start from our overview of business solutions in the UAE. A separate question is where effective management is treated as sitting when the business is run from abroad: that is covered in our article on place of effective management in the UAE.

FAQ: short answers to the questions people actually ask

Does a freelancer in the UAE have to register for corporate tax?

Only if turnover from the activity exceeded AED 1,000,000 in a calendar year. Holding a freelance permit does not create the obligation by itself, but nor does it protect: income earned under such a licence is business income and enters turnover in full.

Does a natural person pay corporate tax on a salary?

No. Article 2(2)(a) of Cabinet Decision 49/2023 takes wages outside corporate tax whatever the amount, and they do not count towards the AED 1,000,000 threshold.

Is rental income from an apartment taxed?

No, provided the letting is neither conducted through a licence nor requires one. An Ejari tenancy registration is not a licence. A Dubai Department of Economy and Tourism permission to let holiday homes is a licence, and income earned under it does enter turnover.

What happens if turnover exceeded AED 1,000,000 but there is no profit?

The duty to register and file arises in full, and the tax payable is nil. The AED 10,000 late registration penalty is charged regardless of the amount of tax.

Can someone deregister once turnover falls below the threshold?

No. Section 6.1 of CTGRNP1: deregistration is available only on complete cessation of all activity. Where turnover falls, a nil return is filed instead.

Does income from clients outside the UAE count?

Yes, where it relates to the business the natural person conducts in the UAE. Article 12(2) of Decree-Law 47/2022 brings into the taxable income of a resident natural person income derived both in and outside the State, insofar as it relates to that UAE business.

Is a licence needed in order to register for corporate tax?

No. Under Table 1 of CTGRNP1, licence details are not mandatory. What is mandatory is contact details and a copy of the passport photo page.

Can an AED 10,000 late registration penalty already paid be recovered?

Yes, if the return for the first tax period is filed within seven months of its end. Under CTP006 the amount is credited to the corporate tax account in EmaraTax. The mechanism applies to the first tax period only.

How long do records have to be kept?

Seven years after the end of the tax period to which they relate — article 56(1) of Decree-Law 47/2022.

Can you pay yourself a salary out of your own business and deduct it?

No. Article 33(5) of Decree-Law 47/2022 disallows any deduction for amounts withdrawn from the business by a natural-person taxable person, even where they are booked as a salary. The natural person and the sole proprietorship are the same taxable person.

Does appointing a licensed property management company destroy the real estate exclusion?

No. Under section 4.2.3 of CTGREI1 it is not relevant to the owner that the agent or management company holds a licence: using an intermediary does not alter the nature of the income or to whom it belongs. Only the owner’s own licence matters.

Is Small Business Relief still available in 2027?

Yes. Ministerial Decision No. 131 of 2026 extended the AED 3,000,000 threshold to tax periods ending on or before 31 December 2029.

Key takeaways

The AED 1,000,000 threshold is measured on gross turnover for the calendar year, not on profit and not business by business.

Wages, personal investment income and real estate investment income do not enter turnover at all — whatever the amount.

The line between personal investment and business is drawn by the licence: holding one, or needing one, makes the income taxable.

The tax period of a natural person is always the Gregorian calendar year, and the first possible period is 2024.

Registration is due by 31 March of the following year; the return and the payment by 30 September.

Small Business Relief reduces the tax to nil up to AED 3,000,000 of turnover and runs to periods ending on or before 31 December 2029.

The AED 10,000 late registration penalty is removed entirely by filing the first period’s return within seven months.

Amounts a natural person withdraws from their own business are never deductible — not even when booked as a salary.

Registration is irreversible: falling below the threshold obliges a nil return but confers no right to deregister.

Summary

A natural person in the UAE is subject to corporate tax only where they conduct a business with gross turnover above AED 1,000,000 in a Gregorian calendar year — the threshold set by article 2(1) of Cabinet Decision No. 49 of 2023. Wages, personal investment income and real estate investment income are excluded from turnover whatever the amount, under article 2(2) of the same decision. The rate is 0% on taxable income up to AED 375,000 under Cabinet Decision No. 116 of 2022 and 9% on the excess under article 3(1)(b) of Federal Decree-Law No. 47 of 2022. The tax period is the calendar year and the first possible period is 2024. The registration application is due by 31 March of the following year under article 5 of FTA Decision No. 3 of 2024, and the return and payment within nine months under articles 48 and 53 of the law, that is by 30 September. The late registration penalty is AED 10,000 and can be removed entirely by filing the first period’s return within seven months under FTA Public Clarification CTP006. Small Business Relief under Ministerial Decision No. 73 of 2023, as amended by Ministerial Decision No. 131 of 2026, reduces the tax to nil where revenue is up to AED 3,000,000, for tax periods ending on or before 31 December 2029.

Sources

1.        Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses — UAE Legislation portal

2.        Federal Decree-Law No. 47 of 2022 and its amendments — Ministry of Finance consolidated text, January 2026 version

3.        Federal Decree-Law No. 60 of 2023 amending Decree-Law No. 47 of 2022

4.        Cabinet Decision No. 49 of 2023 on the categories of business of a natural person

5.        Cabinet Decision No. 116 of 2022 on the amount of annual income subject to corporate tax

6.        Cabinet Decision No. 75 of 2023 on administrative penalties

7.        Cabinet Decision No. 75 of 2023 as amended by Decision No. 10 of 2024 — FTA consolidated text

8.        Cabinet Decision No. 74 of 2023 — Executive Regulation of Decree-Law No. 28 of 2022 on Tax Procedures

9.        FTA Decision No. 1 of 2025 on the grounds for extending the deadline for a reconsideration request

10.    Cabinet Decision No. 55 of 2025 exempting certain persons from corporate tax

11.    Cabinet Decision No. 63 of 2025 on an unincorporated partnership as a taxable person in its own right

12.    Ministerial Decision No. 73 of 2023 on Small Business Relief

13.    Ministerial Decision No. 131 of 2026 amending Ministerial Decision No. 73 of 2023

14.    Ministerial Decision No. 82 of 2023 on audited financial statements

15.    Ministerial Decision No. 84 of 2025 on Audited Financial Statements

16.    Ministerial Decision No. 114 of 2023 on the accounting standards and methods

17.    FTA Decision No. 3 of 2024 on the registration timeline

18.    FTA Decision No. 6 of 2023 on the tax deregistration timeline

19.    FTA Decision No. 7 of 2024 postponing the filing and payment deadline

20.    FTA guide CTGTNP1, “Taxation of Natural Persons under the Corporate Tax Law”, November 2023

21.    FTA guide CTGRNP1, “Registration of Natural Persons”, December 2023

22.    FTA guide CTGREI1, “Real Estate Investment for Natural Persons”, October 2024

23.    FTA Public Clarification CTP006 on the waiver of the late registration penalty

24.    FTA guide CTGSBR1, “Small Business Relief”, August 2023

25.    FTA guide CTGPTN1, “Taxation of Partnerships”, March 2024

26.    Ministerial Decision No. 261 of 2024 on unincorporated partnerships, foreign partnerships and family foundations

27.    FTA: Basis of Taxation — Natural Person

28.    FTA press release urging natural persons to register before the end of March 2025

29.    FTA: corporate tax guides, references and public clarifications

30.    FTA: legislation section

31.    UAE Ministry of Finance: corporate tax section

Disclaimer

This material is provided for information purposes only and does not constitute legal, tax, financial, investment or consulting advice. Before acting, obtain individual professional advice reflecting the specific situation, the jurisdiction, the status of the company and the current requirements of the regulators.

Date of preparation: September 2026.