Is an influencer's income subject to Corporate Tax?

Article 12 – Corporate Tax Base 1. A Resident Person, which is a juridical person, is subject to Corporate Tax on its Taxable Income derived from the State or from outside the State, in accordance with the provisions of this Decree-Law. 2. The Taxable Income of a Resident Person, which is a natural person, is the income derived from the State or from outside the State insofar as it relates to the Business or Business Activity conducted by the natural person in the State as set out in Clause 6 of Article 11 of this Decree-Law. 3. A Non-Resident Person is subject to Corporate Tax on the following: Federal Decree-Law No. 47 of 2022 and its amendments – Unofficial translation (as published by the Ministry of Finance) 17 a. The Taxable Income that is attributable to the Permanent Establishment of the NonResident Person in the State. b. State Sourced Income that is not attributable to a Permanent Establishment of the Non-Resident Person in the State. c. The Taxable Income that is attributable to the nexus of the Non-Resident Person in the State as determined in a decision issued by the Cabinet pursuant to paragraph (c) of Clause 4 of Article 11 of this Decree-Law.

Article 2 – Income Subject to Corporate Tax at 0% (Zero Percent) 1. For the purposes of Paragraph (a) of Clause 1 of Article 3 of the Corporate Tax Law, the portion of Taxable Income of the Taxable Person not exceeding (375,000) three hundred seventy-five thousand dirhams shall be subject to Corporate Tax at the rate of (0%) zero percent in the Tax Period irrespective of whether the Taxable Person conducts multiple Businesses or Business Activity in that Tax Period. 2. Where it is established to the Authority that one or more Persons have artificially separated their Business or Business Activity and the Taxable Income across their entire Business or Business Activity was subject to Corporate Tax at (0%) zero percent in the Tax Period on an amount exceeding (375,000) three hundred seventy-five thousand dirhams, this would be considered an arrangement to obtain a benefit in relation to Corporate Tax under Clause 1 of Article 50 of the Corporate Tax Law. 3. For the purpose of verifying whether two or more Persons have artificially separated their Business or Business Activity, the Authority shall consider whether the arrangement was undertaken for a legitimate commercial purpose and Cabinet Decision No. 116 of 2022 - Unofficial Translation 2 whether the Persons substantially carry on the same Business or Business Activity taking into account all relevant facts and circumstances, including for example without limitation their financial, economic and regulatory ties.

(see Section 3.12). Example 4: A natural person earning money as an influencer A natural person, Mr. B, based in the UAE, creates content on various social media platforms. They earn money from and through these platforms. One source of income comes from collaboration with brand owners to create sponsored content and from participating in brand campaigns. In such collaborations, they negotiate payment terms with the brand, which involve a commission and “in-kind” consideration, such as receiving products from the brand owners. During the 2024 Gregorian calendar year, Mr. B derives Turnover of AED 3,400,000 including the Market Value of “in-kind” payments. Mr. B is considered to be a Resident Person, as he is conducting a Business or Business Activity in the UAE on their own account. His Turnover for the year is in excess of AED 1 million, so the Business or Business Activity would be subject to Corporate Tax. Example 5: A natural person providing consultancy services (employed) A natural person, Miss C, is employed by Company A, a company incorporated and effectively managed and controlled outside the UAE. Miss C provides consultancy services to an unrelated company also based outside the UAE. Miss C does this while being physically present in offices rented by Company A in the UAE. Company A gets paid AED 2 million for the consultancy services rendered by the natural person. In this case, Miss C is not considered to be a Taxable Person as they are an employee of Company A and not conducting Business Activity on their own account. However, Company A may be subject to Corporate Tax as a NonResident Person, if it is considered to have a Permanent Establishment in the UAE. Example 6: A natural person receiving investment income A retired natural person, Mr. D, in the UAE earns portfolio income from money invested through a UAE based asset management company. This is Mr. D’s only source of income. Mr. D does not require a Licence from a Licensing Authority to make their investments. Corporate Tax Guide | Taxation of natural persons under the Corporate Tax Law | CTGTNP1 15