urgent.. The emirates announces the enforcement of corporate tax to individuals

ahmed atef - | Arab News

urgent.. The emirates announces the enforcement of corporate tax to individuals, The United Arab Emirates Ministry of Finance made the announcement today that Cabinet Resolution No. (49) of 2023 has been issued. This resolution addresses the tax treatment of resident and non-resident persons who operate businesses or engage in other types of commercial operations for the purposes of the corporation tax law.

"The new decision confirms the UAE's commitment to implementing a competitive tax system for both local and foreign investors and individuals," Younis Haji Al-Khoury, Undersecretary of the Ministry of Finance, said. "By simplifying the corporate tax system, which contributes to enhancing the attractive business environment that supports the growth of small projects, startups, and the economy in general."


The decision was made in order to clarify the intricacies of applying the corporate tax system in the UAE to natural persons (individuals in this context) and to ensure that the tax is only levied on the business income or business operations of those natural persons. to engage in) is not subject to corporation tax, since persons who carry on business or business activities will only be subject to corporate tax and tax registration requirements if their aggregate sales value surpasses one million AED during the course of the year. This is because individuals who carry on business or business activities are considered to be carrying on business.

enforcement of corporate tax to individuals
enforcement of corporate tax to individuals

tax on individuals

How to calculate the individual tax

For instance, in the event that an individual residing in the UAE operates a business via the Internet and the value of its annual combined sales is greater than one million dirhams, then, in accordance with the new decision, the individual's business income obtained from his work via the Internet will be subject to corporate taxation. This is the case even if the individual's annual combined sales are less than one million dirhams.

However, if the individual residing in the country also generates income from rental properties and personal investments, then these sources of income will not be subject to corporate tax because according to the published decision, they fall into categories that are beyond the purview of the tax. In this case, the individual will not be subject to the corporate tax.

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ahmed atef
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