UAE Corporate Tax: Freelancers rush to meet end March 2025 deadline
Individuals running businesses or partners in JVs too have end-March cut-off date
Dubai: For UAE’s freelance professionals, a key deadline on their corporate tax obligations will close later today. By then, they should have registered for corporate tax – if they haven’t, that makes them liable for penalties (unless the tax authority extends the deadline).
The deadline of end March for CT registration by freelancers and sole proprietor businesses had been repeatedly promoted by the FTA in recent weeks. Yet, if there are still such individuals who are yet to sign up, that’s ‘mostly because of a lack of awareness (on their tax obligations)’, aid Atik Munshi, Managing Partner at Finexpertiza UAE.
“At times, such individuals do not realize that all the income from whatever different business operations they have need to be consolidated.” (Now, taxable income will exempt those from rents, salaries, etc.)
What freelancers should be aware of
If the individual derives a turnover from business activities of over Dh1 million in 2024, they are liable to register for corporate tax by March 31, 2025.
Now, it needn’t be all done in cash. If there are ‘in-kind’ payments, such as an all-expenses paid trip, that too must be included in determining whether the Dh1 million mark has been reached or not.
Who comes under this category?
The Federal Tax Authority’s rules stipulate individuals who are residents in the UAE or elsewhere. They are subject to corporate tax to the ‘extent to which he or she is engaged in a business or business activity in the UAE’.
This could take the form of sole proprietorships or when they are partners in joint ventures that are conducting a business or business activity in the UAE.
The ‘first possible tax period’ for such individuals is 2024.
So, the coverage would also apply to social media influencers, and those individuals having e-trader licenses.
What the FTA says on taxable income
If the individual during 2024 had business or business activity in the UAE and revenue exceeding Dh1 million by July 31, 2024, they are ‘required to submit an application to register’ for CT ‘no later than 31 March 2025’.
Subsequently, they need to file their corporate tax returns ‘no later than 30 September 2025’.
Any failure on the registration side by these individuals invites an administrative Penalty of Dh10,000.
The tax registration process
An existing VAT - or excise tax - registrant can access their account directly through EmiraTax – the digital tax services provider that operates 24 hours a day.
“Following the completion and approval of the registration application for corporate tax, a registration number will be issued for corporate tax purposes,” the FTA added.
New users can access the EmaraTax platform at ‘services.tax.gov.ae’ and create an account by registering with an email ID and a phone number.
Once the user profile is created, the individual can select the corporate tax registration option and proceed with completing the corporate tax registration application.
The FTA has also made it possible to submit corporate tax registration applications through multiple government service centres (Tas’heel Centres) in the UAE.
