The UAE corporate tax regime is a self-assessment regime, which means that a natural person is responsible for assessing whether they are within the scope of Corporate Tax, and whether they will need to fulfill any corporate tax obligations.
A natural person is required to register for Corporate Tax only if he/she falls within the scope of the Corporate Tax. The scope is assessed based on the following conditions:
- He/she is a resident natural person for corporate purposes;
- He/she is a non-resident natural person for corporate tax purposes with permanent establishment in the UAE;
- He/she carries on business/business activities in respect of which total turnover in excess of AED 1 million (within a Gregorian calendar year) is derived; and
- The turnover is not derived from wage, personal investment and real estate investment.
Natural Persons include sole establishments and individual partners in an unincorporated partnership that conduct business/business activities in the UAE.
Turnover threshold determination
- Turnover from all the business activities conducted by a natural person should be taken into consideration in order to determine threshold limit of AED 1 million.
- The total turnover is the sum of all the income before any expenses are deducted.
- The turnover should be determined on an accrual basis unless and otherwise a person follows cash basis of accounting in their system.
- The tax period of a natural person shall be Gregorian calendar year, which means the first tax period would be 2024 Gregorian calendar year.
- For the businesses that are set up during the calendar year 2024, tax period would be the period from the date of commencement of business to the calendar year end.
- A natural person shall have only one Tax registration number (TRN) for Corporate Tax for all his business activities.
- Application for de-registration should be made only if he/she has ceased conducting all of his/her business activities.
- Eligibility for small business relief does not prevent a person from registering for Corporate Tax if he/she has met with the conditions for registration.
Why Spectrum Auditing?
Spectrum Auditing guides you with the laws and regulations of UAE, covering most compliances applicable as well as enable you deal with any queries pertaining to Risk Advisory, Economic Substance Regulations (ESR), Corporate Tax (CT), Transfer Pricing (TP), Ultimate Beneficiary Owner (UBO), Anti Money Laundering (AML), etc., after reviewing your business.
As a pioneer in the field of auditing, accounting, taxation, and advisory services, we keep track of all the changes taking place in the UAE concerning laws, rules, and regulations. We keep our clients informed and regularly share the same information through our blog section or social media handles. Call us today for any kind of assistance at +971 4 2699329or email [email protected] to get all your queries addressed. Spectrum is your partner in your success.
With Spectrum Auditing’s expertise and tailored solutions, we empower businesses to navigate the complexities of corporate taxation, enabling them to thrive in the UAE’s dynamic business environment.