As per the Federal Decree Law No. 47 of 2022, income earned by a natural person, either resident or non-resident, from Business or Business Activity in UAE will be subject to Corporate Tax. It was further provided that a decision specifying the categories of Business or Business Activity that are subject to Corporate Tax will be issued.

In this regard, the Cabinet in the current Decision No. 49 of 2023 has specified that Businesses or Business Activities Conducted by a natural person shall be subject to Corporate Tax only where total Turnover derived from such Businesses or Business Activities exceeds AED 1 million in a calendar year.

Further, income of a natural person from following sources will be out of scope from UAE Corporate Tax:

a. Employment
b. Personal investment (activity which does not require a Licence nor considered as commercial business)
c. Real estate investment (activity which does not require a Licence)

Also, Corporate Tax registration is not required in respect of natural persons whose turnover from business does not exceed
the threshold of AED 1 million and / or earning the above prescribed sources of income.
This is again a welcome decision by the FTA providing much awaited clarity on the taxability of natural persons. Further, the
Turnover threshold of AED 1 million as well as no registration requirement provides a big relief to natural persons having
small scale business activities, running start ups or earning personal passive streams of income.