Corporate Tax for Sole Proprietors and Freelancers

By Shihabudeen Pattasseri, FTA-Registered Tax Agent (TAAN 20056925) · Updated 2026-11-03

Corporate Tax does not only apply to companies. Individuals — sole proprietors, freelancers and professionals — can be taxable persons too, but only once their business activity passes a turnover threshold. Here is how it works.

The AED 1 million threshold

A natural person is subject to Corporate Tax on their business or business activity only if the total turnover from that activity exceeds AED 1 million in a Gregorian calendar year. Below that, the individual is not a taxable person for Corporate Tax.

What is not counted

• Salary and employment income
• Personal investment income, where it is not a licensed business activity
• Real estate investment income, within the defined conditions

If you are over the threshold

• Register for Corporate Tax and obtain a registration number
• You may still benefit from the 0% band up to AED 375,000 of taxable income
• Small Business Relief may apply if revenue is AED 3 million or less
• Keep proper records of business income and expenses

Many freelancers and sole proprietors are below the threshold and have nothing to file, while others are over it without realising. A quick check of your annual turnover settles which group you are in.

Frequently asked questions

Do freelancers pay Corporate Tax in the UAE?

Only if their business turnover exceeds AED 1 million in a calendar year. Below that, a natural person is not a taxable person for Corporate Tax.

Is salary subject to Corporate Tax?

No. Employment income, personal investment income and qualifying real estate income are excluded.

Can sole proprietors claim Small Business Relief?

Yes, if they are resident and their revenue is AED 3 million or less, for the relevant periods.

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