Because freelancers are not our employees and we don't pay taxes on payouts, they must declare any income received via Solar Staff by themselves.
To carry on tax accounting in the United Arab Emirates (UAE) for your Solar Staff income, you need to:
Be a tax resident
Obtain a tax ID number
Determine the applicable tax obligations
Tax residence
The general rule is that the UAE taxes its residents on their worldwide income, while non-residents are taxed on UAE-sourced income only.
An individual is considered a UAE tax resident if they meet any of the following conditions:
Their usual or primary place of residence and their center of financial and personal interests are in the UAE.
They were physically present in the UAE for a period of 183 days or more during a consecutive 12-month period.
They were physically present in the UAE for a period of 90 days or more in a consecutive 12-month period, and:
The individual is a UAE national, holds a valid residence permit in the UAE, or holds the nationality of any GCC Member State
The individual has a permanent place of residence in the UAE
The individual carries on an employment or a business in the UAE
The UAE has double taxation avoidance agreements with a number of countries (full list), the provisions of which may override the applicable tax residence rules and other provisions of national legislation.
In the UAE, individuals get issued a tax number only if they have VAT or income tax obligations. In all other cases, the only identification number individuals have is the ID Number, which is displayed on the front side of their Emirates ID card.
If the freelancer expects VAT or income tax obligations to arise within the next 30 days or at the end of the current month, they must obtain a taxpayer registration number (TRN, رقم التسجيل الضريبي), which consists of 15 digits. The tax authority assigns the TRN within 20 days of the application submission date.
Taxes and contributions payable by freelancers
Tax obligations in respect of freelancing income depend on the freelancer's status and/or fulfillment of certain conditions. UAE-based freelancers can only receive income via Solar Staff as self-employed individuals (green visa).
IMPORTANT! Solar Staff does not have the option to choose a tax status for freelancers based in the UAE, but you can fill in your ID Number or TRN in your account.
In order to legally receive income from freelancing in the UAE, taxpayers must meet one of the following conditions:
Get an eligible immigration status (for example, a remote work visa)
Obtain a special license and a green visa for work as a freelancer
Register a company to conduct business (sole establishment / sole proprietorship)
Please note that:
Offer agreement for receiving income via Solar Staff ≠ employment contract for obtaining a remote work visa
The taxpayer's clients in Solar Staff cannot be considered employers
The freelancer's account must be registered in their name as an individual and not in their company's name, because receiving income to a corporate account in not supported in Solar Staff (learn more about payment options)
Self-employed individual
Both UAE nationals and foreigners can obtain the status of a self-employed individual. It is also necessary to obtain a 5-year green visa, which lets you work as a freelancer.
Taxpayers who wish to apply for a green visa need to submit:
A freelance / self-employment permit from the Ministry of Human Resources and Emiratisation
Proof of a bachelor’s degree or a specialized diploma
Evidence of annual income from self-employment for the previous two years amounting to at least AED 360,000
IMPORTANT! For freelance visas, certain restrictions apply in terms of eligible activities (consultancy, IT, etc.) and free zones. See here for details.
Self-employed individuals are liable to pay the following taxes:
There is currently no personal income tax (ضريبة الدخل) in the United Arab Emirates. Therefore, UAE-based individuals who receive income via Solar Staff are not liable to pay income tax, nor are they required to undergo tax registration.
Self-employed individuals need to pay corporate income tax (الضريبة على الدخل) if their income over a calendar year exceeds AED 1 million. In this case, they must register for tax payment by completing an online form by March 31 of the following year (filling-out instructions). The registration process takes up to 20 business days, after which a taxpayer registration number (TRN) is assigned (if absent). If the obligation is not fulfilled on time, a fine of 10,000 AED will be imposed.
The corporate income tax rate is 9%, a rate of 0% applies to income below 375,000 AED.
Reporting: a tax return must be submitted online through the EmaraTax service within nine months after the end of the tax period (calendar year) – by September 30 of the year following the reporting year (corporate tax guide). If, during any of the tax periods after registration, the income of the self-employed individuals falls below the established threshold, they are required to submit a zero tax return.
Tax payment must be made by the reporting deadline.
Useful links: FAQ; guidance for self-employed individuals.
If they meet certain conditions, UAE-based freelancers may need to pay VAT (ضريبة القيمة المضافة) at a rate of 5%. To pay VAT, you also need to obtain a TRN. The mandatory VAT registration threshold is AED 375,000 for the past 12 months (either actually exceeded or expected to be exceeded in the following 30 days), and the voluntary registration threshold is AED 187,500.
Tax reporting and payment. If taxable turnover does not exceed AED 150 million per year, then VAT returns need to be submitted on a quarterly basis; in other cases, the reporting period is a calendar month. The return is submitted within 28 days of the month following the reporting period. Video instructions: filing a VAT return, VAT payment.
Brochure with details about VAT in the UAEUnemployment insurance scheme, with the fees determined based on the self-employed individual's employment income:
AED 5 per month if the monthly basic salary is AED 16,000 or less
AED 10 per month if the monthly basic salary is more than AED 16,000
Employees with no set basic salary may choose the subscription category themselves.
Reporting and payment of the fees. You may choose the reporting period yourself: monthly, quarterly, semi-annually, or annually. There are a variety of ways to register for the scheme, including a dedicated online portal, mobile app, phone, and special kiosks. Learn more about the fees, registration, and insurance schemes here.
Additional information
UAE's Federal Tax Authority.
UAE's municipal authorities by emirate: Abu Dhabi, Dubai, Fujairah, Ajman, Ras Al Khaimah, Sharjah, Umm Al Quwain.
EmaraTax e-services portal for taxpayers in the UAE.
Income received through Solar Staff is declared based on the Offer Agreement using data from certificates and invoices.
If you have any questions, get in touch via the chat in your Solar Staff account or email us at [email protected].