The UAE Federal Tax Authority (FTA) has developed guidelines on corporate taxation. According to the document, individuals with business income of at least AED 1M (USD 272K) must register for corporate tax. This applies to both residents and those who live outside the UAE, but earn profits here. Income for the year is taken into account in accordance with the Gregorian calendar.
The FTA has advised anyone running an unincorporated business in the UAE to familiarize themselves with the new guidance, as it provides clear criteria to help individuals understand whether they need to pay corporate tax.
According to the guide, corporate tax is levied on non-residents of the UAE who have a permanent establishment in the Emirates with a turnover of AED 1M (USD 272K) or receive business income of this amount. Foreigners who have not received the status of a resident, but get income from state sources in the UAE must also pay tax as well.
Corporate tax is not subject to certain types of income, including wages and profits from investments like real estate.
The obligation to pay corporate tax does not depend on whether the foreigner has fulfilled all the requirements of immigration law and business licensing.