Cabinet Decision No. (49) of 2023 Specifies Categories of Businesses or Business Activities Subject to Corporate Tax for Resident and Non-Resident Natural Persons

The Ministry of Finance has recently made an important announcement regarding the issuance of UAE Cabinet Decision No. (49) of 2023. This decision addresses the treatment of both resident and non-resident individuals who are engaged in business or business activities for the purposes of the Corporate Tax Law.

The primary objective of this decision is to provide clarity on the application of the Corporate Tax regime specifically for natural persons, or individuals. It aims to ensure that only income derived from business or business-related activities is subject to taxation. Furthermore, the decision explicitly states that personal income, such as earnings from employment, investments, and real estate without licensing requirements, will not be subject to Corporate Tax.

Under the new guidelines, individuals conducting business or business activities will only be required to register and pay Corporate Tax if their combined turnover exceeds AED 1 million in a calendar year. This threshold is set to streamline the tax obligations and reduce the administrative burden for individuals with smaller-scale business operations.

Note - You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax