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We would like to update you with the Federal
Tax Authority public clarification recently
issued via the website with regards to Sole
Establishments (or Sole Proprietorships) for
the purposes of VAT, and would like to refer
you to the following points pertinent to this
clarification:
• A Natural Person who owns a number of
Sole Establishments should register for
VAT as a Natural Person if the taxable
supplies made or services provided exceed
the mandatory VAT registration threshold
of AED 375,000.
• A natural person can own a number of
Sole Establishments which may undertake
different lines of business, and in this case
must obtain only one tax registration for
VAT to include all Sole Establishments
under the one VAT registration, with the
understanding that a Sole Establishment
does not have a legal personality
independent or different from its owner.
Separate VAT registrations should not be
sought for the different Sole Establishments
owned by the same person.
• More than one Sole Establishment can be
added to one registration, on the condition
that these entities must be owned by the
same individual.
• As a Natural Person owning a number of Sole
Establishments may obtain only one tax
registration for all its Sole Establishments,
all supplies and services provided by the
registrant must be declared, including
those for all his or her Sole Establishments,
which will be considered collectively in
order to determine whether the person
has outstanding tax obligations.
VAT registration in these cases should ideally
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 VAT
registration in the name of one of its Sole
Establishments, the person may apply to the
FTA accordingly.