As part of the UAE’s evolving tax framework, the Federal Tax Authority (FTA) has issued a clear directive to natural persons conducting business or professional activities: if your annual revenues exceed AED 1 million, you must register for corporate tax no later than 31 March 2025. This requirement applies to sole proprietors, freelancers, consultants, and other individuals earning business income independently.
Failure to comply within the stipulated timeframe could result in administrative penalties, making it crucial for affected individuals to act promptly.
Who Is Considered a ‘Natural Person’ for Corporate Tax?
In this context, a natural person refers to an individual (rather than a legal entity) who engages in business activities in the UAE. Examples include:
- Freelancers and self-employed professionals
- Sole proprietors or individuals operating under trade licences
- Independent consultants or service providers
- Owners of small unincorporated businesses
The threshold for mandatory registration is AED 1 million in annual turnover derived from business activity, excluding salary or personal investment income.
Step-by-Step Guide to Corporate Tax Registration
- Assess Eligibility
Calculate your gross revenue from business activities over the last financial year. If it exceeds AED 1 million, registration is mandatory. - Prepare Required Documentation
You will need:
- Emirates ID and Passport copy
- Valid Trade Licence or Freelancer Permit
- Proof of income (invoices, contracts, financial records)
- Emirates NBD or other local bank account details for refunds or payments
- Tenancy contract or location of business operations
- Create an FTA Account
Visit the FTA e-Services Portal and create a user profile. Ensure all data is accurate and consistent with your documents. - Submit Your Corporate Tax Registration
Once logged in, navigate to the Corporate Tax section and complete the registration form. Attach the required documents and submit your application. - Monitor Application Status and Compliance Deadlines
You will receive a Tax Registration Number (TRN) upon approval. From there, ensure timely filing of returns and payment of any due taxes from the end of your first tax period.
Tips to Avoid Penalties
- Register before 31 March 2025 to avoid administrative fines.
- Maintain proper bookkeeping and digital records of your business income and expenses.
- Engage a tax advisor or accountant if you are uncertain about your obligations or thresholds.
- Review your business structure — it may be beneficial to transition into a legal entity in some cases.
Conclusion
The UAE’s introduction of corporate tax obligations for natural persons is a significant step toward enhancing the country’s fiscal sustainability and aligning with international standards. While this marks a new chapter for many independent earners, proactive registration and compliance will ensure business continuity and legal protection.
