Taxable Person

What is a Taxable Person?

A Taxable Person is any person (individual, company, partnership, or other entity) who conducts an economic activity independently and is registered or required to be registered for tax purposes in the UAE. The concept applies to both VAT and Corporate Tax.

Becoming a Taxable Person for VAT

Mandatory Registration

AED 375,000

Annual taxable supplies exceed this threshold - must register within 30 days

Voluntary Registration

AED 187,500

Annual taxable supplies or expenses exceed this - may voluntarily register

Rights of a Taxable Person

Recover Input Tax: Claim VAT paid on business purchases and expenses
Issue Tax Invoices: Provide valid tax invoices to customers showing TRN and VAT
Display TRN: Show Tax Registration Number on business documents and communications

Obligations of a Taxable Person

1 Charge VAT: Collect VAT on taxable supplies at the correct rate
2 File Returns: Submit VAT returns quarterly or monthly as required
3 Pay VAT Due: Remit net VAT to FTA within deadlines
4 Maintain Records: Keep all tax-related documents for 5 years (15 years for real estate)
5 Update Information: Notify FTA of changes to business details within 20 days

Taxable Person for Corporate Tax

For Corporate Tax purposes (effective from June 2023), a Taxable Person includes:

UAE resident juridical persons (companies, partnerships)
Non-resident juridical persons with permanent establishment in UAE
Natural persons conducting business in UAE (under certain conditions)
Free Zone Persons (subject to 0% or 9% rate depending on QFZP status)

Who is NOT a Taxable Person?

Individuals engaged in employment (employees)
Businesses below registration thresholds who don't voluntarily register
Entities making only exempt supplies
Government entities (in their sovereign capacity)
Non-profit organizations meeting specific criteria

Economic Activity

To be a Taxable Person, you must conduct an "economic activity" which includes any activity conducted on an ongoing basis for consideration, including commercial, industrial, agricultural, professional, or service activities.