Corporate Tax for Freelancers and Sole Establishments in the UAE

An individual comes into UAE corporate tax only when the turnover from their business or business activity in the UAE exceeds AED 1 million in a calendar year. Below that, there is no corporate tax registration or return to file.

The test uses turnover, not profit, and it adds together all the business activities the individual carries on, including freelance permits and sole establishments.

A sole establishment is not a separate legal person, so its income is taxed in the owner's hands as a natural person. A limited liability company owned by one person is different: it is a company and must register for corporate tax regardless of turnover.

An individual's tax period is the calendar year. Once turnover exceeds AED 1 million, you must register by 31 March of the following year and file your return by 30 September of that year. Tax is 0% on the first AED 375,000 of taxable income and 9% above that, and Small Business Relief may be available if revenue is AED 3 million or less.

VAT has its own threshold. A freelancer whose taxable supplies exceed AED 375,000 in 12 months must register for VAT even if corporate tax does not yet apply.

We track freelancers' turnover against both thresholds, register them with the FTA at the right time and prepare simple, compliant accounts and returns.