Corporate Tax is not only for companies. A natural person who runs a business in the UAE, such as a freelancer, consultant or sole trader, can fall within it too. But the rules are narrower than many people fear, and your salary and personal investments are not part of it.
The AED 1 million test
Under Cabinet Decision No. 49 of 2023, an individual is subject to Corporate Tax only if the total turnover from their business or business activities in the UAE exceeds AED 1 million in a calendar year.
Turnover means gross business income before costs, not profit. If several businesses or freelance activities are run by the same person, their turnover is added together.
What does not count
These types of income are not business income for this purpose and do not count towards the AED 1 million:
- Wages and salary from employment
- Personal investment income, such as dividends, interest and gains on shares, as long as the activity does not need a licence
- Real estate investment income, such as rent from property you own personally, as long as the activity does not need a licence
So an employee who earns rental income from two apartments is not brought into Corporate Tax by that rent.
If you cross the threshold
- Register for Corporate Tax. A UAE resident individual must register by 31 March of the year after the year in which turnover passed AED 1 million. Late registration carries a penalty of AED 10,000.
- Keep proper records of business income and expenses.
- File a return for each calendar year within 9 months of the year end, so by 30 September, and pay any tax due.
Tax is charged at 0% on taxable income up to AED 375,000 and 9% above that. Taxable income is your business profit after deductible expenses, not your turnover.
Small Business Relief
If your business revenue is AED 3 million or less, you can elect for Small Business Relief in your return. You are then treated as having no taxable income for that period, but you must still register and file.
Common mistakes
- Mixing personal and business money. Keep a separate bank account for the business so turnover is easy to prove.
- Counting profit instead of turnover when checking the AED 1 million test.
- Assuming a freelance permit means no tax. The test is about turnover, not the type of licence.
How Dreambooks helps
Dreambooks tracks your business turnover through the year against the AED 1 million and AED 3 million thresholds, keeps business income and expenses separate from personal spending, and prepares the figures for your Corporate Tax return.
Official sources
- Cabinet Decision No. 49 of 2023 on business activities conducted by a natural person
- FTA: natural persons urged to register for Corporate Tax before the March deadline
- FTA: Small Business Relief
- FTA: Corporate Tax legislation
This article is general information as of June 2026, not tax advice. Check the latest FTA guidance, or speak to your tax adviser, before acting.