The FTA has mandated that all natural persons conducting taxable business activities must register for Corporate Tax by March 31, 2025. Failure to comply will result in an administrative penalty of AED 10,000.
Source: https://www.arabianbusiness.com/industries/banking-finance/uae-corporate-tax-fta-sets-march-deadline-for-registration-of-natural-persons
Who Must Register?
A natural person refers to any living individual, regardless of residency. Registration for Corporate Tax is mandatory if:
- They operate a business or business activity in the UAE.
- Their annual turnover exceeds AED 1 million in a Gregorian calendar year.
- They function as a sole establishment or an individual partner in an unincorporated partnership.
Exemptions from Registration
A natural person is not required to register for Corporate Tax if their income solely originates from:
- Employment wages (salaries and remuneration from an employer).
- Personal investment income (including dividends and capital gains from stock market investments, provided it is not part of a licensed business activity).
- Real estate investment income (rental or sale of property, unless conducted through a licensed business or requiring a license).
Turnover Calculation and Tax Period
The turnover threshold of AED 1 million is determined based on gross income derived during a Gregorian calendar year from all taxable business activities conducted in the UAE. Turnover excludes:
- Employment income, personal investment income, and real estate investment income.
- Earnings that do not qualify as business activity as defined under the Corporate Tax Law.
The tax period for a natural person is the Gregorian calendar year (January 1 – December 31). Once registered, the taxable person must file Corporate Tax returns annually.
Penalties for Non-Compliance
Failure to meet the registration deadline or fulfill tax obligations will lead to penalties, including:
- AED 10,000 fine for failing to register on time.
- Additional fines for late filing, non-payment, or inaccurate reporting.
- Potential forced registration by the FTA if a taxable person does not voluntarily comply.
- Interest charges on unpaid Corporate Tax liabilities.
Corporate Tax Responsibilities After Registration
Once registered, natural persons are required to:
- Maintain accurate financial records to track income and expenses.
- File an annual Corporate Tax return within nine months after the end of the tax period.
- Retain business-related documentation for at least seven years for audit purposes.
- Ensure compliance with UAE tax laws, including any updates or amendments issued by the FTA.
Source: Registration of Natural Persons | Corporate Tax Guide | CTGRNP1
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