Key takeaways
- A natural person in the UAE is subject to corporate tax only when turnover from a business or business activity exceeds AED 1,000,000 in a Gregorian calendar year (Cabinet Decision No. 49 of 2023).
- Turnover means gross income before any costs, so a licensed consultant who invoices AED 1,150,000 is over the threshold even when profit is far lower.
- Wages, personal investment income and real estate investment income that needs no licence never count toward the AED 1,000,000, however large they are.
- A person who crosses the threshold in a calendar year must register for corporate tax by 31 March of the following year, and missing the deadline carries an administrative penalty of AED 10,000.
- Crossing the AED 1,000,000 line doesn't mean paying 9% on everything: the first AED 375,000 of taxable income is taxed at 0%, and Small Business Relief can remove the tax altogether while revenue stays at or below AED 3,000,000.
- Once registered, an individual stays registered and files a return every year, even a nil return, until every business activity has ended.
What is the AED 1 million turnover rule for individuals?
The rule says a natural person is taxed under UAE corporate tax only if turnover from their business or business activities exceeds AED 1,000,000 in a Gregorian calendar year. It comes from Cabinet Decision No. 49 of 2023, issued under Article 11 of Federal Decree-Law No. 47 of 2022, and the FTA applies it from calendar year 2024. For non-residents, the test is applied to the turnover of a UAE permanent establishment.
The figure is a gate, not an allowance. Turnover has to exceed AED 1,000,000, so exactly AED 1,000,000 doesn't trigger tax; and once the gate is passed, the FTA's guide states there is no exemption for the first AED 1,000,000 of turnover.
What counts toward the AED 1,000,000 turnover?
Turnover is the gross amount of income derived from a person's UAE business activities during the calendar year, before deducting costs. It is measured on an accrual basis unless the person uses the cash basis of accounting.
| Type of income | Counts toward AED 1,000,000? | Condition |
|---|---|---|
| Sole establishment or freelance revenue | Yes | Activity carried on regularly, on an ongoing and independent basis |
| Share of income from a transparent unincorporated partnership | Yes | Added to any sole establishment income |
| Payments in kind | Yes | Valued at market value |
| Wages from employment | No | Excluded whatever the amount |
| Personal investment income | No | Own account, no licence needed, not a commercial business |
| Real estate investment income | No | Sale, lease or rent of UAE property that needs no licence |
| Income from a separate foreign business | No | Only if unrelated to the UAE business |
Say a licensed marketing consultant invoices AED 1,150,000 in a calendar year and carries AED 700,000 of costs. Turnover is AED 1,150,000, so the person is over the threshold, even though profit is AED 450,000. (This is a hypothetical illustration, ignoring tax adjustments.)
Who has to register for corporate tax, and by when?
A resident individual whose turnover passes AED 1,000,000 in a calendar year must register by 31 March of the following year; a non-resident with a UAE permanent establishment has three months from meeting the conditions.
| Person | Trigger | Registration deadline |
|---|---|---|
| Resident individual with a UAE business | Turnover above AED 1,000,000 in a calendar year | 31 March of the following year (for 2024, that was 31 March 2025) |
| Non-resident individual with a UAE permanent establishment | Permanent establishment turnover above AED 1,000,000 | Within three months of meeting the conditions |
| Individual with only wages, personal investment or real estate investment income | None | No registration needed |
The tax period is the calendar year, and the return and any payment are due nine months after it ends: 30 September 2027 for calendar year 2026. If you'd rather not track these dates by hand, the free UAE compliance calendar lists them for your company, personalised from a few questions, as a PDF and calendar file.
AED 1,000,000: turnover from a business or business activity, in one Gregorian calendar year, above which a natural person becomes subject to UAE corporate tax. Source: Cabinet Decision No. 49 of 2023, Article 2, checked 29 October 2026.
What are the penalties for getting it wrong?
Failing to register by the FTA's deadline carries an administrative penalty of AED 10,000 under Cabinet Decision No. 75 of 2023. Record-keeping failures are penalised separately, and the FTA has a waiver that can cancel the late registration penalty in specific cases.
| Violation | Penalty | Source |
|---|---|---|
| Failing to register within the FTA's deadline | AED 10,000 | Cabinet Decision No. 75 of 2023 |
| Failing to keep records | AED 10,000 per violation; AED 20,000 if repeated within 24 months | Cabinet Decision No. 75 of 2023 |
| Late return | Charged per month or part of a month; confirm the current amounts in the Decision | Cabinet Decision No. 75 of 2023 |
Under FTA Public Clarification CTP006, the late registration penalty is waived when the person files the return for their first tax period within seven months of its end, instead of the usual nine. The waiver covers natural persons, took effect on 14 April 2025 and applies to penalties from 1 June 2023; the deadline for paying the tax stays at nine months. For a first tax period ending 31 December 2026, seven months runs to 31 July 2027. Confirm the waiver is still in force before relying on it.
Does crossing AED 1 million mean paying 9% on everything?
No. Corporate tax applies to taxable income, not turnover: the FTA's guide sets 0% on the portion of taxable income up to AED 375,000 and 9% on the portion above it. In the consultant example above, taxable income of AED 450,000 would give tax of 9% on AED 75,000, which is AED 6,750 (a hypothetical figure before any adjustments).
Small Business Relief can go further. A resident individual with revenue of AED 3,000,000 or less in the current tax period and every previous one can elect to be treated as having no taxable income for that period. The Ministry of Finance announced on 7 August 2026 that Ministerial Decision No. 131 of 2026 extends the relief to tax periods ending on or before 31 December 2029. Electing it means giving up other exemptions, reliefs and deductions for that period.
How do you register an individual for corporate tax on EmaraTax?
An individual registers through the FTA's EmaraTax portal, using the existing login if they already have one for VAT or excise tax. The FTA's registration guide for natural persons sets out the process:
- Log in to EmaraTax, or create credentials if you don't have any.
- Prepare your phone number, address and email, a copy of the passport photo page and, if applicable, both sides of your Emirates ID. Licence details, VAT registration details and bank details are optional.
- Submit the application with the supporting documents.
- Wait for the FTA to review it; the FTA aims to respond to a complete application within 20 business days, and issues a Tax Registration Number on approval.
- Report any change to your registration details within 20 business days.
- File the return and pay within nine months of the end of the tax period, and keep your records for seven years after it.
What most guides don't tell you
Registration doesn't switch off when turnover falls. The FTA's guide says a registered individual stays registered while any business activity continues, even if turnover drops below AED 1,000,000, and files a nil return. Deregistration is possible only after every business has ceased, must be applied for within three months of cessation, and is refused until all returns are filed and all penalties are paid.
Small Business Relief doesn't cancel the registration duty. An individual over AED 1,000,000 must still register and file; the relief is elected in a later tax period if the conditions are met.
Having no licence doesn't take income out of turnover. The FTA's guide excludes personal investment and real estate investment income only where the activity is neither carried out through a licence nor requires one. Doing licensable work without a licence leaves the income in the count.
Which deadlines apply to your business?
Registration, the nine-month return deadline and any waiver window all depend on when your turnover crossed the line and when your tax period ends. The free UAE compliance calendar lists your UAE tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Frequently asked questions
Do individuals pay corporate tax on their business income? Only if turnover from a business or business activity exceeds AED 1,000,000 in a Gregorian calendar year. Below that line, an individual isn't conducting a taxable business under Cabinet Decision No. 49 of 2023 and doesn't need to register.
Do freelancers have to pay corporate tax in the UAE? Freelancers follow the same AED 1,000,000 rule: freelance income counts as business turnover when the work is regular and independent, and corporate tax applies once that turnover passes the threshold in a calendar year. Salary from an employer is excluded from the count.
Is rental income from property subject to UAE corporate tax? Income an individual earns from selling, leasing or renting land or real estate in the UAE is excluded from the test when the activity needs no licence from a licensing authority. If the letting does require a licence, the exclusion doesn't apply, so check with the authority that regulates the activity.
Is personal investment income taxed under corporate tax? Not for individuals, where the investment is made for their own account, needs no licence and isn't a commercial business. That income is outside the AED 1,000,000 turnover test however large it is.
Do sole establishments need to register for corporate tax? For corporate tax, the FTA treats a sole establishment and its owner as the same person. The owner must register once turnover from the establishment, added to any other business income, exceeds AED 1,000,000 in a calendar year.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- Cabinet Decision No. 49 of 2023, Ministry of Finance
- FTA Corporate Tax Guide: Taxation of Natural Persons (CTGTNP1)
- FTA Corporate Tax Guide: Registration of Natural Persons
- FTA: new Decision on specified timeframes for Corporate Tax registration (FTA Decision No. 3 of 2024)
- FTA: natural persons urged to register for Corporate Tax before end of March 2025
- FTA: guide outlining criteria to determine natural persons subject to Corporate Tax
- Cabinet Decision No. 75 of 2023 on administrative penalties for Corporate Tax violations, UAE Legislation portal
- FTA Public Clarification CTP006: waiver of late registration administrative penalty
- FTA: Small Business Relief (Corporate Tax)
- Ministry of Finance: extension of Small Business Relief until 31 December 2029 (Ministerial Decision No. 131 of 2026)
Last checked: 29 October 2026
This is general information, not tax or legal advice for your specific situation.