Do employees in the UAE pay tax on their salary?

necessary Licence from the relevant UAE Licensing Authority. Mr. G also continues to provide therapy sessions to his regular patients in his clinic in Country A while he is back home. Mr. G is considered to be a Resident Person in the UAE, as he is conducting Business or Business Activity in the UAE. Due to his work in the UAE and reputation for providing high-quality services, Mr. G receives requests to provide treatment sessions from therapy centres in various Gulf countries. In this scenario, when calculating the Mr. G’s Turnover, both the income derived from the UAE and from other Gulf countries (not being considered as Wage) should be included as they relate to Business or Business Activities conducted in the UAE. The income derived from the Gulf countries relates to the Business or Business Activity in the UAE because those services are attributable to the UAE practice. As for the income derived in Country A, it is not related to Mr. G’s Business in the UAE since it was solely earned from regular patients of the separate Business in that Country. 3.8. Exclusions from Corporate Tax For a natural person, the income from specific activities (Wage, Personal Investment income and Real Estate Investment income) is not subject to Corporate Tax as these sources are not considered as Business or Business Activities under the Corporate Tax Law. This income is also not taken into account in determining if a natural person has derived Turnover in excess of AED 1 million in a Gregorian calendar year from Business or Business Activities conducted in the UAE. 3.8.1. Wage Wage, including any compensation or benefit received, whether in cash or in-kind, by any employee from their employer is not subject to Corporate Tax. Thus, a salary or other form of remuneration received by a natural person as an employee from their employer would not fall within the scope of Corporate Tax. The question of whether a natural person is an employee and earns a salary or other form of remuneration as such, is a question of fact to be determined on a case-by-case basis. A natural person appointed as a director, for example as a member of the board of directors of a Public Joint Stock Company, may receive fees and other similar payments for carrying out this role, either in the course of their employment or as an Corporate Tax Guide | Taxation of natural persons under the Corporate Tax Law | CTGTNP1 19

3.2.5.1. Wage Wage, including any compensation or benefit received, whether in cash or in-kind, by any employee from his/her employer is not subject to Corporate Tax. Thus, a salary or other form of remuneration received by a natural person as an employee from his/her employer would not fall within the scope of Corporate Tax. 3.2.5.2. Personal Investment income Personal Investment income is not subject to Corporate Tax when derived by a natural person from investment activity conducted in his/her personal capacity that is neither conducted through a Licence or requiring a Licence from a Licensing Authority, nor considered as a commercial business in accordance with the Commercial Transactions Law.9 3.2.5.3. Real Estate Investment income Real Estate Investment income is not subject to Corporate Tax when derived by a natural person if it is related, directly or indirectly, to the selling, leasing, sub-leasing, and renting of land or real estate property in the UAE that is not conducted through a Licence nor requiring a Licence from a Licensing Authority.10 Whether or not a natural person’s activities which give rise to investment income or income from the selling, leasing, sub-leasing, and renting of land or real estate property in the UAE, is conducted through a Licence or required to be conducted through a Licence, is a question of fact to be determined by each natural person based on his/her own facts and circumstances. 3.2.5.4. Natural person not exceeding the AED 1 million threshold If a natural person conducts a Business or Business Activity in the UAE and his/her total Turnover does not exceed AED 1 million in a Gregorian calendar year, he/she will not be subject to Corporate Tax, hence the natural person would not need to register for Corporate Tax. For further details on taxable Business or Business Activities for natural persons, readers are advised to consult Cabinet Decision No. 49 of 2023. 9 Article 1 of Cabinet Decision No. 49 of 2023. 10 Article 1 of Cabinet Decision No. 49 of 2023. Corporate Tax Guide | Registration of Natural Persons | CTGRNP1 15