UAE corporate tax came into effect on 1 June 2023. Since then, one of the most consistent sources of confusion among Dubai’s business community has been the rules for natural persons — individuals who run their own businesses rather than through a company.

If you are a freelancer, sole trader, consultant, or small business owner operating in the UAE, this guide is written for you. It answers the questions we hear every week at Risians Accounting & Tax Consultancy: Do I need to register? How is my threshold calculated? How much will I actually pay? What do I need to file?

Unlike deadline-driven content, this guide is designed to be useful whenever you read it — whether you are just starting your business in the UAE, approaching the registration threshold, or already registered and preparing your first return.

Quick Reference: Key UAE Corporate Tax Numbers

Figure	What It Means
AED 1,000,000	Annual gross business revenue above which natural persons must register for corporate tax
AED 375,000	Taxable income threshold — 0% rate applies below this; 9% applies above it
9%	Corporate tax rate on taxable income exceeding AED 375,000
AED 3,000,000	Revenue ceiling for Small Business Relief election (simplified/nil tax treatment)
7 years	How long you must retain financial records
9 months	Time after financial year end to file your corporate tax return and pay tax due
AED 10,000	Penalty for failing to register when required
20 business days	Window to notify FTA of material changes to your business

1. Does UAE Corporate Tax Apply to You?

UAE corporate tax applies to businesses and individuals conducting business activity in the UAE. Whether it applies to you personally depends on how you earn your income.

You ARE likely subject to corporate tax if you:

• Run a sole trader business under a UAE trade licence in your own name
• Hold a freelance permit from a UAE free zone (DMCC, Dubai Media City, IFZA, Dubai Internet City, twofour54, Abu Dhabi Global Market, etc.)
• Earn professional service income in your own name — consulting, legal, IT, engineering, creative, medical, or similar fields
• Earn commercial property rental income from UAE property held in your personal name
• Operate as a partner in an unincorporated partnership where income is assessed at the individual level

You are generally NOT subject to corporate tax on:

• Employment income from a UAE employer — your salary is completely outside the corporate tax net
• Dividends received from UAE companies in which you hold shares
• Capital gains from the sale of personal investments such as shares or UAE real estate held personally
• Bank interest on personal savings accounts

The critical dividing line is business activity. If you are running a business — invoicing clients, providing services, selling goods — in your own name, corporate tax rules apply to you as a natural person.

💡  Dual-income situations Many people in Dubai earn both a salary and consulting income on the side. Your employment income does not count toward any corporate tax threshold. Only your business income — the consulting, freelance, or trading revenue — is relevant. If your side business revenue stays below AED 1 million per year, you are not required to register for corporate tax.

2. The AED 1 Million Registration Threshold Explained

Not every self-employed person or freelancer must register for UAE corporate tax. The registration obligation only applies when your annual gross business revenue crosses AED 1 million.

What counts as gross revenue?

Gross revenue means total income before deducting any expenses. It is not your profit. Some examples:

• AED 1.3M revenue, AED 900K costs → must register. You crossed AED 1 million gross even though your net profit was AED 400K.
• AED 800K revenue, AED 100K costs → no registration required. Gross revenue is below the threshold.
• Two income streams of AED 600K each → must register. Aggregate gross revenue is AED 1.2 million. Both streams are combined.

Which year’s revenue is assessed?

The registration threshold is assessed per calendar year (1 January to 31 December). If you crossed AED 1 million in a given year, you are required to register for corporate tax for that year. If you did not cross the threshold, you are not required to register — regardless of previous years.

This means registration is not a one-time decision. You should monitor your revenue each year. If you are consistently below the threshold, you may never need to register. If your business grows and you cross AED 1 million in a future year, the registration obligation begins that year.

What about income earned outside the UAE?

Income derived from business activities that are physically conducted in the UAE counts toward your threshold, even if the client or payment source is overseas. A Dubai-based freelancer invoicing an American client for work done in Dubai has UAE-sourced business income. Income from activities conducted entirely outside the UAE — while you are physically abroad on a long-term basis — requires a more specific analysis.

⚠️  Close to the threshold? If your annual revenue is between AED 850,000 and AED 1.2 million, we recommend a formal revenue review with an accountant before concluding whether registration is required. Underestimating your revenue and failing to register when required carries a AED 10,000 penalty. Overestimating and registering when not required is also possible and avoidable.

3. How Much UAE Corporate Tax Will You Actually Pay?

This is the question that worries most people — and the answer is often more reassuring than expected.

Corporate tax is charged on taxable income, not on revenue. Taxable income is calculated after deducting your allowable business expenses. The rate structure is:

Taxable Income Band	Corporate Tax Rate
AED 0 – AED 375,000	0%  (zero rate — no tax payable on this portion)
Above AED 375,000	9%  (only on the amount exceeding AED 375,000)

Worked example: a Dubai-based management consultant

Item	Amount (AED)
Annual consulting revenue	1,400,000
Business expenses (office, software, travel, professional fees)	(480,000)
Depreciation on business equipment	(40,000)
Taxable income	880,000
Tax on first AED 375,000	0  (zero rate)
Tax on remaining AED 505,000 @ 9%	45,450
Total corporate tax payable	45,450

Effective tax rate on total revenue of AED 1.4 million: approximately 3.25%. This illustrates why the 9% headline rate overstates the actual burden for most small businesses — the zero-rate band and deductible expenses significantly reduce the taxable base.

What expenses are deductible?

Under UAE corporate tax law, business expenses that are incurred wholly and exclusively for business purposes are generally deductible. Common deductible expenses for sole traders and freelancers include:

• Office rent, co-working space membership, or home office costs (proportionate to business use)
• Professional software, subscriptions, and digital tools
• Business travel — flights, accommodation, ground transport for client meetings
• Professional development — courses, certifications, conferences relevant to your business
• Professional fees — accounting, legal, consulting services for your business
• Business communications — phone, internet (proportionate to business use)
• Depreciation on business equipment — laptops, cameras, specialist tools
• Marketing and advertising costs
• Bank charges and financing costs on business borrowings

What is NOT deductible?

• Personal expenses — even if paid from a business account
• Entertainment expenses above the permitted limit
• Fines and penalties
• Expenses not supported by a valid tax invoice or receipt

💡  Risians Accounting — Deduction Review Service One of the most valuable things we do for newly registered taxpayers is conduct a thorough deduction review before their first corporate tax return. Many UAE freelancers and sole traders are not claiming all the expenses they are entitled to — and a conservative deduction approach can mean paying significantly more tax than necessary. A deduction review typically identifies 15–30% more allowable costs than clients had originally estimated. Contact us at risiansaccounting.com/contact.

4. Small Business Relief — Could Your Tax Be Nil?

If your total annual revenue is below AED 3 million, you may be eligible to elect for Small Business Relief — a simplified treatment under which your taxable income is treated as nil for the relevant tax period.

This means no corporate tax payable, even if your net profit would otherwise exceed AED 375,000.

Conditions for Small Business Relief:

• Your revenue must be AED 3 million or below in the relevant tax period
• You must not be a member of a multinational enterprise group
• You must make the election on your corporate tax return — it is not automatic
• The election is available for tax periods ending on or before 31 December 2026 (subject to future extension by the Ministry of Finance)

Should you elect for Small Business Relief?

For most sole traders and freelancers with revenue below AED 3 million, electing for Small Business Relief will result in zero corporate tax — which is clearly attractive. However, there are situations where not electing may be preferable:

• If you have accumulated losses that you want to carry forward to future years — the relief election may affect your ability to do so
• If you anticipate crossing AED 3 million in revenue in future years and want an established accounting base

This decision is worth discussing with an accountant before your first filing. Risians Accounting advises all newly registered clients on whether the Small Business Relief election is appropriate for their specific situation.

5. How to Register for Corporate Tax on EmaraTax

Corporate tax registration for natural persons is completed through the FTA’s EmaraTax portal at emiratax.ae. Here is the full process:

1. Create or log in to UAE Pass. UAE Pass is the digital identity system required for EmaraTax. Register at uaepass.ae if you do not already have an account. Allow 1–2 business days for verification before attempting EmaraTax registration.
2. Access EmaraTax at EmaraTax.ae. Log in using your UAE Pass credentials. If you have previously registered for VAT, your EmaraTax account is already active — navigate to the Corporate Tax section.
3. Select ‘Register for Corporate Tax’ and choose ‘Natural Person.’ Do not select ‘Legal Entity’ — this applies to companies, not individuals. Selecting the wrong entity type causes complications that require support to resolve.
4. Complete your business profile. You will provide: your Emirates ID number, trade licence number (or free zone registration number for freelancers), details of your business activities, your preferred financial year end (31 December is standard for natural persons), and UAE bank account details.
5. Upload supporting documents. Typically required: Emirates ID copy, trade licence or free zone registration certificate, and sometimes a bank letter confirming your account details.
6. Submit and await your Tax Registration Number (TRN). Processing takes 3–10 business days. Your TRN will appear in your EmaraTax dashboard and must be quoted on all tax invoices you issue going forward.

🏢  Let Risians Handle Your Registration: Risians Accounting completes EmaraTax corporate tax registrations on behalf of clients — including document preparation, submission, and follow-up with the FTA. Most registrations are completed within 5 working days of receiving your documents. We also check your VAT registration status at the same time, as many of our clients are not aware they may have both obligations.

6. Your Obligations After Registration

Registration is the beginning, not the end. Once you have your TRN, here are your ongoing obligations:

Annual corporate tax return

You must file a corporate tax return each year covering your financial year. For natural persons with a 31 December financial year end, the return must be filed and any tax paid within 9 months of year end — so by 30 September of the following year.

The return requires you to declare your revenue, your deductible expenses, your taxable income, and any elections (such as Small Business Relief). A straightforward return for a sole trader with clean bookkeeping typically takes 2–4 hours to prepare if your records are well-organised.

Record keeping

You are required to maintain financial records for at least 7 years from the end of the relevant tax period. Records include: all invoices issued, all purchase receipts and expense records, bank statements, any contracts relevant to your income or expenses, and asset registers if you have depreciable business assets.

Electronic records are acceptable provided they are stored securely and are retrievable on request from the FTA.

Updating the FTA on changes

If there are material changes to your business — a new business activity, a change in your trade name, significant change in revenue model, or change of financial year end — you must notify the FTA within 20 business days through EmaraTax.

Your TRN on invoices

Once registered, your Tax Registration Number must appear on all tax invoices you issue. A missing or incorrect TRN on a VAT invoice carries a separate penalty of AED 2,500 per invoice. If you are both VAT-registered and corporate tax registered, your VAT TRN and corporate tax TRN are different numbers — check which applies to which document.

7. Corporate Tax vs VAT: Understanding Both Obligations

Corporate tax and VAT are two separate UAE tax regimes. Many business owners confuse them or assume that registering for one satisfies the other.

	Corporate Tax	VAT
Registration threshold	AED 1M gross revenue (natural persons)	AED 375K taxable supplies in any 12-month period
What is taxed	Your net profit (after expenses)	The sale price of goods/services (collected from customers)
Rate	0% up to AED 375K profit; 9% above	5% standard; 0% for exports; exempt for some sectors
Filing frequency	Annual	Quarterly (or monthly for some businesses)
Who bears the cost	The business owner	The end consumer (business collects and remits)
Separate registration?	Yes — separate TRN via EmaraTax	Yes — separate TRN via EmaraTax

The VAT registration threshold — AED 375,000 in taxable supplies — is lower than the corporate tax threshold of AED 1 million. This means some freelancers and sole traders may be VAT-registered but not yet required to register for corporate tax. Conversely, if you cross AED 1 million in revenue and register for corporate tax, you should also confirm whether you have been VAT-registered throughout that period — some businesses in this range have outstanding VAT registration obligations they are unaware of.

8. How Risians Accounting Helps UAE Natural Persons With Corporate Tax

Risians Accounting is a UAE-registered accounting and tax advisory firm based at Burj Gate, Downtown Dubai. Our team holds ACCA, CPA, and UAE Ministry of Finance registered tax agent qualifications.

We work with UAE freelancers, sole traders, consultants, and small business owners across all sectors and free zones. Here is specifically what we do:

• Threshold assessment — we review your revenue and confirm whether you are required to register, taking into account all income streams and the correct calendar year
• EmaraTax registration — we handle the full registration process including document preparation, submission, and TRN confirmation
• Deduction review — before your first return, we review all your business expenses to ensure every allowable cost is claimed
• Small Business Relief advice — we advise on whether the SBR election is appropriate for your situation
• Annual corporate tax return preparation and filing — we prepare your return, calculate your tax, and file through EmaraTax
• VAT cross-check — we review your VAT registration status at the same time to confirm both obligations are correctly in place
• Ongoing advisory — we answer questions throughout the year as your business changes

9. Frequently Asked Questions

These are the questions our team at Risians Accounting hears most often from natural persons navigating UAE corporate tax for the first time.

Q1. I am a freelancer. Do I need to register for corporate tax?

You need to register if your annual gross business revenue exceeds AED 1 million. Your free zone status — DMCC, Dubai Media City, IFZA, or any other — does not exempt you. If you are a freelance permit holder and your revenue crosses AED 1 million in a calendar year, corporate tax registration is required.

Q2. How do I calculate my AED 1 million threshold?

Add up all gross revenue from business activities from 1 January to 31 December. This means total amounts invoiced and received, before deducting any expenses. If you have more than one business activity, combine all streams. Employment income (salary) is not included.

Q3. What if my revenue crossed AED 1 million only because of a one-off project?

The threshold is assessed on actual annual revenue, not on a ‘normal’ or ‘expected’ revenue level. If your total 2024 revenue was above AED 1 million — even due to a single large project — the registration obligation applies for that year. If the following year your revenue drops below AED 1 million, you can apply to deregister after filing that year’s return.

Q4. My revenue is AED 1.1 million but my profit is only AED 150,000. How much tax will I owe?

Corporate tax is based on taxable income (profit after allowable deductions), not revenue. If your taxable income is AED 150,000 — below the AED 375,000 threshold — your corporate tax liability is zero. You still must register (because your revenue exceeded AED 1 million), but you will not owe any tax for that year.

Q5. Do I need to register as a company, or can I register as myself?

You register as a natural person — yourself as an individual. You do not need to incorporate a company to comply with UAE corporate tax if you are currently operating as a sole trader or freelancer. The registration is made through EmaraTax under the ‘Natural Person’ entity type.

Q6. I have a mainland trade licence and also a free zone freelance permit. Do I register twice?

No. As a natural person, you make a single corporate tax registration that covers all your business activities. On your EmaraTax registration, you declare all your business licences and activities. Your single TRN applies across all of them.

Q7. I am both employed (salary) and self-employed (consulting). How does this work?

Your salary is completely excluded from corporate tax. Only your consulting revenue counts toward the AED 1 million threshold. If your consulting revenue alone exceeds AED 1 million, you must register. If it is below AED 1 million, you are not required to register — regardless of how large your salary is.

Q8. When must I file my first corporate tax return?

For natural persons with a 31 December financial year end (the standard), your first corporate tax return covers the year ended 31 December and must be filed within 9 months — by 30 September of the following year. Any tax owed must also be paid by the same date. Your first return will be for the year in which you first crossed the AED 1 million threshold.

Q9. What records do I need to keep?

Keep all of the following for at least 7 years: sales invoices and receipts, purchase invoices and expense receipts, bank statements for all accounts used in the business, contracts and agreements, asset purchase documentation, and any FTA correspondence. Electronic records stored securely are acceptable.

Q10. Can I deduct my home office if I work from home?

A proportionate deduction for home office costs is generally allowable — for example, if your home office occupies 15% of your home’s floor area and is used exclusively for work, 15% of your rent or mortgage interest, utilities, and broadband may be deductible. You need to be able to justify the proportion claimed if the FTA requests explanation.

Q11. What happens if I don’t register but the FTA finds out?

A fixed AED 10,000 administrative penalty applies for failing to register when required. Beyond the penalty, if you have been operating above the threshold without registering, you may also face a corporate tax assessment for the period of non-registration — plus interest. The cost of not registering significantly exceeds the cost of registering and paying the correct tax.

Q12. I want to incorporate a company instead of continuing as a sole trader. Does that help?

Incorporating a UAE mainland LLC or free zone company means your business income is assessed at the entity level rather than as a natural person. This can have advantages — the AED 375,000 zero-rate band applies to the company, and there may be planning opportunities around salary versus profit extraction. However, incorporation also brings additional costs (licence renewal, audit requirements for some free zones) and compliance obligations. We advise clients on this decision regularly — it depends on your revenue level, sector, and long-term plans.

Q13. My business revenue is AED 2.5 million. Am I eligible for Small Business Relief?

Yes — if your revenue is AED 2.5 million, you are below the AED 3 million Small Business Relief threshold and can elect for simplified treatment (nil taxable income) on your corporate tax return. This means zero corporate tax payable for the relevant period, regardless of your actual profit. You still need to file a return and make the election — it is not automatic. We recommend discussing this election with an accountant to confirm it is the right choice for your situation.

Q14. Is there a difference between registering for corporate tax and paying corporate tax?

Yes — and this distinction is important. Registration is the administrative step of getting your TRN and entering the FTA system. Whether you actually owe any tax depends on your taxable income. You might register for corporate tax and then owe zero tax because your taxable income is below AED 375,000 or because you elect for Small Business Relief. Registration and liability are two separate questions.

📋  Free Corporate Tax Assessment — Know Where You Stand Not sure whether you need to register, how much you might owe, or whether Small Business Relief applies to you? Risians Accounting offers a free initial corporate tax assessment for UAE freelancers, sole traders, and small business owners.  We will review your revenue, identify your likely tax position, advise on deductions, and give you a clear picture of your obligations — at no charge for the initial consultation.  Contact us: risiansaccounting.com/contact  |  +971 52 341 4327  |  Burj Gate, Downtown Dubai