Does the new UAE CT applies to day tradings

[TheCryptoAnt]

in UAE you pay CIT even as physical person if you do business as physical person

Exactly, 'do business'.

Trading your own money is very far from 'doing business', thats my point.

I understand what you're asking for but I'd be surprised if any of these jurisdictions have a simple one-pager saying "If you trade like X, Y, and Z conditions, you're a corporation." It's different rules coming together. The jurisdictions I have written down here are the usual tax hells: Spain, Canada, Australia, Germany.

I lived in ES for years and you never, by any chance, can get taxed as a corp for trading crypto. As a matter of fact its never considered PIT neither it holds as CGT there regardless of frequency. Dunno about the rest.

Essentially, it's like any activity. If you do enough of it personally, there's a risk it becomes a business activity. They look at things like whether it's a full-time activity, your sole/primary source of income, and so on. If your activities mimic those of a company, there is a non-zero risk you're taxed as a company. Buy and sell a couple of things on Ebay and no one bats an eye. Make it a multi-million dollar activity and the tax man cometh.

Sure, they can say whatever they want however I (using myself as an example) am not a separated entity from myself, and got no clients so this ruling wouldn't hold in court imo.

Didn't have a reason to look into this in much detail before, but it seems enforcement is mostly to extract social security contributions that wouldn't be due if you're paying just PIT/CGT.

This I can imagine for Spain tho, they make you pay 'autonomos' so you pay SS but this is not the same as CIT.

 

[Konstanz]

Exactly, 'do business'.

Trading your own money is very far from 'doing business', thats my point.



I lived in ES for years and you never, by any chance, can get taxed as a corp for trading crypto. As a matter of fact its never considered PIT neither it holds as CGT there regardless of frequency. Dunno about the rest.



Sure, they can say whatever they want however I (using myself as an example) am not a separated entity from myself, and got no clients so this ruling wouldn't hold in court imo.




This I can imagine for Spain tho, they make you pay 'autonomos' so you pay SS but this is not the same as CIT.

not necessary you are considered as company. In many countries if you do business as physical person you pay personal income tax on top social taxes.

in UAE case they clearly say CIT is applicable if you do business. And yes if you do day trading it's business. No necessary you need to have "customers". For example, they already explained that if you do real estate business as physical person in UAE, you pay CIT

Many people thought that this UAE CIT will be just formality but we clearly see that they intention is to find new ways of taxing business besides VAT

 

[Sols]

not necessary you are considered as company. In many countries if you do business as physical person you pay personal income tax on top social taxes.

Indeed. This is the salient point. It's not about a change in how a person is viewed legally. You're still a natural person. It's just that an activity can be considered a business activity and taxed as such.

 

[Konstanz]

The one can say you buy sell property is also not business , but personal investment. However, it was already clarified, that both individuals and companies will have to pay CIT:
https://www.khaleejtimes.com/busine...rate-tax-on-the-real-estate-sector-in-the-uae
I don't understand why people still invest in Dubai, because it de facto has personal income tax through business activity CIT

 

[Mercury]

Exactly, 'do business'.

Trading your own money is very far from 'doing business', thats my point.

Sadly, as other members mentioned, many countries can and will requalify your personal trading activity as business and tax it as such, especially if it's your one and only or main income source.
That's one reason why people incorporate their self-trading activities.

 

[PhantomOf ThePits]

Yes that's unfortunately exactly the point.

It doesn't make sense in the first place, but if you dig deeper into their understanding and it is your main source of income, you'd be considered doing a business activity (no matter if you're incooperated or not)

@CryptoAnt: That you didnt get taxed in Spain, doesnt mean its evidence there's no tax -- just noone looked into it.

For the moment, as far as I read until now, it's not clear if active trading wont be considered a business activity (no matter if you're incooporated, which visa your on, if its only your money and so on).

Please look into the Guide called 'Taxation of natural persons' on the FTA website and cite where it's clear you wouldnt be taxed on your personal trading?
https://tax.gov.ae//Datafolder/Files/Guides/CT/Taxation of natural persons - 25 11 2023.pdfI read it many times and unfortunately it's not clear to me.

I'd be happy of course private active trading of personal funds wont be considered liable for corp tax purposes.

 

[TheCryptoAnt]

Indeed. This is the salient point. It's not about a change in how a person is viewed legally. You're still a natural person. It's just that an activity can be considered a business activity and taxed as such.

If this is the case... Im gonna get real sad.

All legal options are disappearing; at this point Im gonna have to resort to play the 'mismanaged place' card.

 

[Sols]

If this is the case... Im gonna get real sad.

All legal options are disappearing; at this point Im gonna have to resort to play the 'mismanaged place' card.

AFAIK, it's a fringe thing meant to capture people who do it at a scale or in a manner that's commercial or business like. As mentioned, when it's done is mainly to capture social security contributions. Sales tax/VAT is another tax they like to capture when classifying some hobby/personal activities as business.

The average or even above average retail investor is likely not targeted by any of this.

But it's something to be mindful of if you're approaching professional level.

 

[TheCryptoAnt]

The average or even above average retail investor is likely not targeted by any of this.

But it's something to be mindful of if you're approaching professional level.

This ship is long sailed for me, and my (legal) options are getting reduced almost by the day.

 

[Thomas67]

I understand what you're asking for but I'd be surprised if any of these jurisdictions have a simple one-pager saying "If you trade like X, Y, and Z conditions, you're a corporation." It's different rules coming together. The jurisdictions I have written down here are the usual tax hells: Spain, Canada, Australia, Germany.

Essentially, it's like any activity. If you do enough of it personally, there's a risk it becomes a business activity. They look at things like whether it's a full-time activity, your sole/primary source of income, and so on. If your activities mimic those of a company, there is a non-zero risk you're taxed as a company. Buy and sell a couple of things on Ebay and no one bats an eye. Make it a multi-million dollar activity and the tax man cometh.

Didn't have a reason to look into this in much detail before, but it seems enforcement is mostly to extract social security contributions that wouldn't be due if you're paying just PIT/CGT. PIT/CGT is higher than CIT in many cases so the tax authority has no interest taxing you less. It's all about finding reasons to tax you more and in new ways.

Social security contributions in UAE really or general reasoning?

 

[Sols]

Social security contributions in UAE really or general reasoning?

General reasoning. Not enough clarity on the disaster that is UAE's rollout of taxation to comment specifically on that jurisdiction.