Navigating Various Scenarios in Corporate Tax Registration for Individuals

Scenario 1: A natural person is a shareholder in a UAE joint stock company and does not conduct business independently from the company.

• The income from being a shareholder will be classified as personal investment income, so the natural person will not be required to register for corporate tax.

Scenario 2: A natural person develops accounting software in her home in Sharjah and starts selling licenses to companies. The total sales in a Gregorian calendar year are AED 1.2 million.

• The natural person is required to register as she is conducting a business in the UAE, and her total turnover in the Gregorian calendar year exceeds AED 1 million.

Scenario 3: A natural person is a shareholder of a UAE joint stock company and opens an independent car rental agency operated from his home in Abu Dhabi that generates a monthly income of AED 1.5 million.

• The income from being a shareholder will be classified as personal investment income and will not be subject to corporate tax. However, the natural person is required to register as he is conducting a business in the UAE (i.e., the car rental agency business), and his total turnover in the Gregorian calendar year exceeds AED 1 million.

Scenario 4: A natural person employed by a UAE limited liability company sells her two personal cars for more than AED 550,000 each.

• The natural person is not required to register on the basis that the selling of her personal cars is not a business activity, and her wage is also not subject to corporate tax.

Scenario 5: A natural person derives rental income of AED 1.5 million from two apartments he owns in the UAE that he bought as a real estate investment.

• The natural person is not required to register as the rental income will be classified as real estate investment income, which is not subject to corporate tax for natural persons.