UAE Tax for freelancers

 Freelancing has been a great way of earning money from around the world. You can work from home and get good earnings. The freelancers have left their full-time jobs to work better on their projects directly linked to clients. They do not have to commute daily, saving them fuel. For many freelancers, it has also become their full-time job as it does not involve any commute like the traditional jobs. In the UAE, only the businesses have to pay taxes. The working class is relieved of taxes, so people come to work in the UAE. The question is whether corporate tax applies to freelancers. Yes, if you are a freelancer, you must pay a certain amount of corporate tax. But freelancer might also need a help from lawyers.

What is a Corporate Tax

The income generated from your business profits is known as corporate tax. Corporate tax is enforced on all business and commercial activities in the UAE. Some businesses are different in their corporate tax calculations because they have extraction from natural resources, such as oil and gas.

How is Tax Applied?

The corporate tax levied on businesses is known as taxable income that will be generated from business profits. However, a certain amount of tax is applicable when the business reaches a certain profit level. As a business owner in the UAE, you should know that your business is taxable only if it includes extraction from the natural resources in the UAE. This means your income is taxable if you have a trade license, permit, or any income earned under freelancer permits. However, the corporate tax is levied only above AED 375,000.

Freelancers Paying Corporate Tax in the UAE

You must pay corporate tax if you work as a freelancer, team, or sole trader. A freelance job could be anything that gets your business sales from your content or development. For example, a web developer or a social media influencer must pay the corporate tax.

How Do I File a Corporate Tax?

The corporate tax in the UAE is levied on a certain amount of income generated from business activity. The first step is to register your business. You will have to register your business with the UAE tax authority. The second step is to file your taxes every year. You will have to add the income and expenses and if any deductions were made throughout the year. The last step is to pay the corporate tax from the net profits of your business.

Who Can Help Me with Taxation?

A professional legal expert can handle your corporate tax collection if you are new to the business. They can also guide you through international and local laws that the UAE is working on.

Always plan your business activities to keep your business operations smooth.

How Else Can I Be Exempted from the UAE Corporate Law?

You can exempt yourself from the UAE corporate law in different ways:

You will not have to pay corporate tax on your income, whether a public or a private employee.

Investments made through personal income or shares will not be taxed.

A registered business operating within the UAE in free zones will pay the tax. However, free-zone businesses are granted exemption if their business activity is outside the UAE. It is important to note that corporate tax is applied in the fiscal year that begins from July until June of the next year. If a business has a financial year from January to December, it will pay corporate tax in January, i.e., one year after the business operations.

Introducing the UAE corporate tax regime will boost the country's international business practices to ensure strategy and that the object meets objectives. Moreover, it will also meet the new international standards of tax that will defuse undesirable tax practices.