Corporate Tax on Sole Establishments in UAE : Guide [2025]

As the UAE introduces a formal corporate tax regime, many business owners are seeking clarity—particularly those operating under a Sole establishment structure.

This blog provides essential insights on Corporate Tax Registration for sole establishments, including registration and compliance obligations, timelines, and how multiple sole establishment licenses are to be treated.

Understanding Sole Establishment License

A sole establishment is a legal structure where the individual and the business are not separate legal entities. While this structure is simple and cost-effective, it still falls within the scope of the UAE’s corporate tax laws. Sole establishments are subject to the standard 9% corporate tax rate on net profits exceeding the AED 375,000 threshold, similar to other business entities. However, the registration threshold for sole establishments is much relaxed.

Corporate Tax Registration for Sole Establishments

The first step in corporate tax registration is determining whether your sole establishment business meet the registration criteria. For Sole Establishment License Holders, this means assessing whether your annual turnover exceeds AED 1 million. If your turnover is below this threshold, you are not required to register for corporate tax.

Corporate Tax Compliance Requirements for Sole Establishments

Once registered, sole establishments must:

• Maintain audited financial records (based on revenue thresholds)
• File annual corporate tax returns
• Pay corporate tax within the stipulated deadlines
• Ensure ongoing filing compliance with FTA guidelines to avoid penalties

In addition, those already under the VAT regime should note that VAT registration for sole establishments does not automatically fulfil the corporate tax registration requirement—both are separate obligations under UAE tax law.

Multiple Sole Establishments : One Owner, Several Licenses

If your combined turnover from all licenses crosses the threshold of AED 1 Million, you, as the natural person, will register for Corporate Tax once under your Emirates ID/personal details. You will then report the consolidated income from all your sole establishments under that single Corporate Tax registration.

This is similar to how VAT registration works for sole establishments, where a single VAT registration covers all sole establishments owned by an individual.

Even with a single registration, it is crucial to maintain proper financial records for each of your sole establishments to accurately calculate your overall turnover and taxable income.

Final Thoughts: Taking Charge of Your Sole Establishment’s Tax Obligations

With the UAE shifting to a structured tax environment, sole establishments can no longer remain on the side lines. Whether it’s your first trade license or you operate multiple sole establishments, understanding and meeting your corporate tax obligations is now non-negotiable. Timely registration, accurate reporting, and distinguishing between corporate tax and VAT registration for sole establishments are crucial steps to remain compliant and penalty-free.

SME owners are encouraged to consult qualified tax advisors like Protax Advisors to evaluate their obligations and ensure smooth compliance with the UAE’s evolving tax framework.