Deadline Approaches for the Natural Person to register for Corporate Tax who are generating over AED 1 M though business activities.

Deadline Approaches for the Natural Person to register for Corporate Tax who are generating over AED 1 M though business activities.

In a press release, the Federal Tax Authority (“FTA”) announced that if a natural person conducts business or business activities in the UAE in 2024 or any subsequent year, and their total turnover exceeds AED 1 Million in that calendar year, they are considered a Taxable Person. Such individuals must register for Corporate Tax by no later than 31 March of the year following the year in which their turnover surpasses the AED 1 million threshold and fulfill all Corporate Tax obligations. 

Federal Tax Authority (FTA) urges Natural Persons to register for Corporate Tax before end of March 2025 to avoid Administrative Penalties.

UAE tax authority sets deadline for sole businesses, unincorporated partnerships

‘Natural persons’ have until March end to register for corporate tax purposes provided they meet the income threshold.

Dubai: Individuals running a one-person business operation should register for corporate tax by or before March 31, 2025, according to a reminder issued by Federal Tax Authority.

The rule also applies to those individuals who are partners in ‘unincorporated partnerships’.

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1. The first potential tax period for such persons conducting a business or business activity is the calendar year.
2. If these persons have exceeded Dh1 million in 2024, they are eligible to be a ‘taxable person’.
3. If the Dh1 million limit is breached in subsequent years, then these individuals must comply with all their corporate tax obligations.

The FTA defines a ‘natural person’ as being resident in the UAE or elsewhere, but engaged in a business or business activity.

For instance, if the person generated revenue exceeding by Dh1 million by 31 July 2024, they are required to submit an application to register for corporate tax not later than March 31, 2025. And submit the corporate tax Return no later than September 30, 2025.

Mind the penalty

If individuals who fail to register by the deadline, they are subject to an administrative penalty of Dh10,000.

“All relevant persons are encouraged to familiarise themselves with the Corporate Tax legislation, implementing decisions, guides, public clarifications and relevant awareness publications available on the FTA website,” the statement said.

Registration is available through the EmaraTax platform. The FTA has also published the ‘Corporate Tax Registration – Taxpayer User Manual’, which includes details on how to register through EmaraTax.

New users can access the EmaraTax platform at eservices.tax.gov.ae and create an account by registering with an email ID and phone number. Once the user profile is created, the individual can select the corporate tax registration option and complete the application.Or they could submit the applications through the Tas’heel centres.

With the latest update, the FTA closes the loop on which entities and individuals conducting business in the UAE are up for compulsory corporate tax registration. Those individuals who have so far not been prepared to go through the process will need to pick up speed. Tax registration might seem a fairly straight forward set of steps that need to be taken, but there is still a lot of preparatory work.

Once they get to the point of actually registering, then the more difficult part of the process gets done. Even if the FTA were to ask for more details in the submissions, the individuals will still have time on their hands to get it done.

That’s also enough for them to avoid the administrative penalty of Dh10,000, at the very least.

The FTA announced in a press release today, that if a natural person is conducting a Business or Business Activity in the UAE during the calendar year 2024, or subsequent years, and their total Turnover in that calendar year exceeded AED 1 million, they are a Taxable Person, who must register for Corporate Tax no later than 31 March of the calendar year following the year in which their total Turnover exceeded the AED 1 million threshold, and comply with all their Corporate Tax obligations.

For example, if a natural person conducts a Business or Business Activity in the UAE during the 2024 calendar year, and their Revenue exceeded AED 1 million by 31 July 2024, they are required to submit an application to register for Corporate Tax no later than the 31 March 2025, and, consequently, submit a Corporate Tax Return no later than 30 September 2025.