Clarifications on VAT Registration of Sole Establishments

Clarifications on VAT Registration of Sole Establishments: FTA releases Public Clarification on VAT registration of Sole Establishments.

A natural person may own a number of sole establishments and there has been uncertainty on VAT registration of these establishments.

The Federal Tax Authority, UAE, has released a new public clarification ‘VATP021’ addressing the VAT registration of “Sole Establishments.’ The key points of this clarification are:

1. As per Law since each person can only obtain one VAT registration, the natural person should include all of his sole establishments under one VAT registration. The sole establishments are not eligible to get registered separately;
2. VAT registration should be obtained in the name of the natural person that owns the sole establishments. However, if a natural person, owning multiple sole establishments, wishes to obtain the VAT registration in the name of one of its sole establishments, the FTA will consider the request;
3. While evaluating the VAT registration threshold, the taxable supplies by a natural person, as well as his sole establishment must be considered collectively to determine the VAT registration obligations.
4. If different sole establishments of a natural person have already received separate VAT registrations in the past, FTA will review such registrations in certain cases and will inform the relevant taxable persons of the corrective steps they should take, if any. No action need be taken for amending the existing registrations until specifically directed by the Federal Tax Authority (FTA);
5. All future registration applications of Sole Establishments should adhere to this public clarification, i.e., they should be collectively registered under the name of the owner itself;
6.  The above clarification does not apply to one Person Company LLC or other similar legal entities that are seen as distinct and separate legal persons from their owners.

Reference: https://tax.gov.ae/-/media/Files/FTA/links/Public-Clarification/VAT-registration-of-Sole-Establishments.pdf