In the context of UAE VAT Registration, VAT Group Registration allows two or more individuals engaged in business activities to collectively apply for tax registration. A VAT group is essentially a collection of two or more individuals registered with the FTA (Federal Tax Authority) as a single taxable entity, subject to specific requirements outlined in the UAE VAT Law. This group registration serves the sole purpose of managing taxation matters.
Conditions for Applying for VAT Group Registration:
To be eligible for VAT Group registration, the following conditions must be met:
1. Each person must have a place of establishment or a fixed establishment in the State:
This means that each person should have either of the following establishments in the UAE:
– Place of Establishment: This refers to the location where a business is legally established in the UAE in accordance with the establishment decision or where significant management decisions are made, and central management functions are carried out.
– Fixed Establishment: Any fixed place of business, distinct from the place of establishment, where the person regularly or permanently conducts business and possesses the necessary human and technological resources to supply or acquire Goods or Services. This includes branches, which are also considered fixed establishments.
2. The relevant persons must be Related Parties:
Here, related parties are defined as two or more individuals or entities not separated on economic, financial, or regulatory levels, where one party can control the other through legal means or by holding shares or voting rights.
3. One or more persons conducting business in a partnership must control the others:
This implies that within the group, one or more related individuals or entities must exercise control over the other businesses, such as officers or directors of one another’s businesses, or partners in each other’s businesses.
Illustration of VAT Group Registration:
As illustrated in the example, Mr. Abdul serves as a Director in Rose Trading Ltd and as a Partner in A-One Trading Ltd. Mr. Rizwan is a Director of A-One Trading Ltd and a Partner in Rose Trading Ltd. Consequently, Mr. Abdul and Mr. Rizwan qualify as related parties and can apply for VAT Group Registration provided they meet the stipulated conditions.
Benefits of VAT Group Registration:
VAT Group Registration offers several advantages for businesses, including:
1. All entities within a VAT Group are treated as a single entity for VAT purposes. This simplifies VAT accounting and streamlines compliance reporting, as VAT returns are prepared and reported at the group level, rather than for individual entities
2. Supplies between entities within a VAT Group are exempt from VAT. This means that VAT is not levied on transactions between group members. However, supplies made by the VAT group to entities outside the VAT group remain subject to VAT.
You can also register VAT Group Registration in our website: