Freelancer Tax in the UAE and Saudi Arabia 2026: When to Register

A salary and freelance income are taxed differently

The UAE and Saudi Arabia do not tax salaries. But if you work for yourself, as a designer, developer, consultant or content creator, you do not earn a salary. You earn business income, and that falls under other taxes:

VAT: on your sales once they pass the registration threshold.
Corporate tax in the UAE: on an individual's profits once their business turnover passes a set threshold.
Income tax or zakat in Saudi Arabia: depending on the nationality of the person running the business.

If you are an employee with a side business, your salary stays out of these calculations and the side business is counted on its own.

UAE: when does a freelancer pay corporate tax?

Cabinet Decision No. 49 of 2023 sets when an individual becomes subject to corporate tax: when their total turnover from business activity in the UAE passes 1 million dirhams in a calendar year.

The following never count towards this threshold or the tax, however large:

Wages and salaries.
Personal investment income.
Real estate investment income, if it does not need a licence.

Rates: 0% on taxable income up to 375,000 dirhams, and 9% on the amount above it.

Small business relief: if turnover does not exceed 3 million dirhams in the tax period and the periods before it, you can elect to be treated as having no taxable income. Ministerial Decision No. 131 of 2026 extended this relief to tax periods ending on or before 31 December 2029.

Registration: a resident individual who passes the threshold registers with the Federal Tax Authority (FTA) by 31 March of the following year.

Permit: freelancing needs a permit or licence. The Ministry of Human Resources and Emiratisation issues a freelance work permit for people who work independently without an employer sponsor, and the free zones in each emirate issue their own licences.

Worked example: a freelance designer in Dubai

Case 1: turnover in 2026 was 1,200,000 dirhams, and expenses were 600,000 dirhams.

Turnover passed 1 million dirhams, so the designer must register for corporate tax before 31 March 2027.
Turnover is below 3 million, so they can elect small business relief and owe no corporate tax.
Turnover passed 375,000 dirhams, so they must register for VAT and charge 5% on their taxable services.

Case 2: turnover of 3,500,000 dirhams and taxable profit of 800,000 dirhams.

Small business relief is not available because turnover passed 3 million.
Tax: (800,000 - 375,000) × 9% = 38,250 dirhams.
Effective rate on profit: about 4.8%.

This example is simplified and does not cover the rules on deductions and non-deductible expenses. If you have a side business alongside a salary, work out the salary on its own with the UAE calculator.

VAT: the same threshold in both countries

UAE: registration is mandatory if your taxable supplies and imports passed 375,000 dirhams over the last 12 months, or are expected to pass it in the next 30 days. You can register voluntarily from 187,500 dirhams. The rate is 5%.

Saudi Arabia: the mandatory threshold is 375,000 riyals and the voluntary threshold is 187,500 riyals, under the GCC Unified VAT Agreement. The rate is 15%.

If you are registered in Saudi Arabia, you must also follow the e-invoicing system (Fatoora). Its first phase started on 4 December 2021, and the second has been rolled out in waves since 1 January 2023.

Registering means you add VAT to your invoices and pay it to the state, and you reclaim the VAT on purchases linked to your business. Work out any amount with the VAT calculator, and read the guide to VAT in Arab countries.

Saudi Arabia: the freelance document

The freelance document is issued by the Ministry of Human Resources and Social Development through the Freelance platform. The main points:

Saudis only. You need an active Absher account and must be at least 18.
Free for now, valid for one year. You can hold up to 5 documents for different activities.
What it allows: running an approved activity as an individual, verifying an online store, opening a bank account linked to the activity, and using point-of-sale and e-invoicing.
What it does not allow: hiring workers, opening a shop, or commercial import and export. These need a commercial registration.

The document regulates the activity. It does not exempt you from tax obligations. If your turnover passes the VAT threshold, you must register.

Saudi Arabia: zakat for Saudis, income tax for non-Saudis

The Saudi system treats business profits differently depending on nationality:

A resident non-Saudi running a business pays income tax at 20% on their profits, under Articles 2 and 7 of the Income Tax Law.
Saudis and GCC nationals pay zakat. The Zakat Collection Implementing Regulations cover a resident Saudi running a licensed activity in the Kingdom.

Does working under the freelance document count as an activity subject to zakat with the authority? We found no explicit text, so ask the Zakat, Tax and Customs Authority (ZATCA) about your case. The difference between zakat and tax is explained in the guide to zakat and tax.

Note that expats in Saudi Arabia cannot get the freelance document. Working for yourself needs another legal framework, set by the relevant authorities.

A short checklist for freelancers

Track your turnover every month against the 375,000 VAT threshold in both countries.
In the UAE, track the 1 million dirham corporate tax threshold, and remember the 31 March registration deadline.
Keep your expense invoices. They lower your taxable profit and let you reclaim input VAT.
Keep your business account separate from your personal account.
If you have income from your home country or moved during the year, read the guide to tax residency.

This guide explains the general rules as published by the official authorities. It is not a substitute for advice from a licensed accountant or tax adviser.

Frequently asked questions

Do freelancers pay tax in the UAE?

There is no tax on income until business turnover passes 1 million dirhams a year. After that you register for corporate tax: 0% up to 375,000 dirhams of taxable income and 9% above it. You can elect small business relief if your turnover does not exceed 3 million.

When must I register for VAT in Saudi Arabia?

When your taxable supplies pass 375,000 riyals a year. You can register voluntarily from 187,500 riyals.

Can expats in Saudi Arabia get the freelance document?

No. The freelance document is for Saudis only. It is issued through the Freelance platform of the Ministry of Human Resources and Social Development.

How much does the freelance document cost?

It is free for now, according to the Freelance platform, and valid for one year. Fees may change in future, so check the platform.

Does my salary count towards the 1 million dirham corporate tax threshold?

No. Wages and salaries are excluded, as are personal investment income and real estate investment income that needs no licence. The threshold counts business turnover only.

When does small business relief end in the UAE?

Ministerial Decision No. 131 of 2026 extended it to tax periods ending on or before 31 December 2029, for anyone whose turnover does not exceed 3 million dirhams.

Do foreigners pay tax on business profits in Saudi Arabia?

Yes. A resident non-Saudi running a business pays income tax at 20% on their profits. Salaries are not business activity and are not subject to this tax.

Sources

This guide is general information, not tax advice. Rules change; check with the authority or a qualified adviser before you act. How we work.

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Freelancer taxes in the UAE and Saudi Arabia: when to register and when to pay