VAT Registration: Natural Persons- Impact of UAE VAT On Individuals:
Registering with the Federal Tax Authority (FTA) for a VAT Tax Registration Number (TRN) can raise a lot of questions for businesses. Most of the Natural Persons who owns multiple businesses have these common questions regarding VAT registration:
- Should they request for a separate TRN no. for each business owned by them or
- Seek one TRN no. for all businesses owned by them
FTA recently published a Clarification (VATP021) on the subject to help Natural Person comply with VAT law and regulations. Some of the important points to consider from the Clarification include:
Who should register for VAT – Natural Person or his Sole Establishments separately
A Natural Person owning a number of sole establishments needs to obtain only one VAT registration. He/she does not require separate VAT registration for each establishment.
FTA further noted, the Clarification does not apply to a One-Person Company LLC or other similar legal entities. These entities are distinct and separate legal persons from their owners.
VAT tax registration threshold:
Taxable supplies by a natural person, as well as his sole establishment, are considered collectively to determine the VAT registration obligations.
Action based on the Clarification:
Future VAT tax Registrations
For Natural Person owning one or more sole establishments,following rule applies:
– The value of supplies by the natural person along with its sole establishments must be aggregated to assess whether the VAT registration threshold has been exceeded
(see our recent blog on VAT registration)
Existing VAT Registrations
VAT registrations received in the past, no action is required to amend the VAT registrations, until directed by the FTA.
Disclaimer
The article covers points which we consider are important in nature. The article doesn’t capture all the elements covered by the FTA Public Clarification. We request users to read the full article (VAT registration of ‘Sole Establishments’) before making a final decision.
Accountant’s Box is a UAE based accounting and VAT advisory firm. We can assist you in registering your company for VAT in the UAE. Our dedicated team will provide all necessary guidance on VAT registration and the Impact of UAE VAT On Individuals. For information, you could reach us at info@accountantsbox.com.