The UAE Ministry of Finance has announced the issuance of UAE Cabinet Decision No. (49) of 2023, which focuses on the treatment of resident and non-resident individuals involved in business activities for the purpose of the Corporate Tax Law. The decision aims to maintain a clear and competitive tax framework for both local and foreign individual investors.
Under the new Cabinet Decision, the Corporate Tax system is simplified to ensure that only income derived from business or business-related activities is subject to taxation. Personal income from employment, investments, and real estate without licensing requirements is not taxable under Corporate Tax.
Key highlights of the decision include:
Only individuals with a combined turnover exceeding AED 1 million in a calendar year will be subject to Corporate Tax and registration requirements.
UAE residents operating online businesses will be subject to Corporate Tax if their annual turnover from the business exceeds AED 1 million. However, income from rental properties and personal investments falls under the out-of-scope categories and is not subject to Corporate Tax.
The new decision aims to foster an attractive business environment that supports the growth of small businesses, startups, and the overall economy. It provides clarity on the application of the Corporate Tax regime for individuals engaged in business activities.
At Canzaps Middle East, we understand the importance of staying compliant with the latest tax regulations in the UAE. Our team of experts can assist individuals undertaking business activities, providing guidance on tax planning, registration, and compliance to help optimize their tax positions.
The issuance of UAE Cabinet Decision No. (49) of 2023 demonstrates the UAE’s commitment to maintaining a competitive tax framework while providing clarity for individuals involved in business activities. Our company is dedicated to supporting individuals in navigating these changes and meeting their tax obligations effectively.