Answer:
UAE Corporate Tax applies to both juridical and natural persons, under specific conditions. A juridical person (e.g., LLC, PSC, PJSC, foreign company) is subject to Corporate Tax if it is:
- Incorporated in the UAE, or
- Incorporated abroad but effectively managed and controlled in the UAE, or
- A foreign entity with a Permanent Establishment in the UAE.
A natural person (individual) is subject to Corporate Tax only on income from business or business activities conducted in the UAE, including activities via sole establishments or unincorporated partnerships. Income from employment, real estate investments (not requiring a license), or personal investments is excluded. (Article 11 of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses)
Examples:
- An LLC incorporated in Dubai is automatically subject to UAE Corporate Tax on its worldwide income.
- A foreign company with a PE in Abu Dhabi must pay UAE Corporate Tax on income attributed to that Permanent Establishment.
- A freelance software developer earning AED 1.2 million annually in the UAE must register and pay Corporate Tax, as income exceeds the...