A VAT Group allows two or more related parties to register as a single taxable person for VAT purposes, which simplifies VAT compliance and reporting.
- Eligibility Criteria
The following key conditions shall be fulfilled by group entities to become a part of the VAT group:
- Each company shall have a place of establishment or fixed establishment in the UAE
- The relevant companies shall be related parties
- One or more company conducting business in a partnership shall control the others
- Each company should be a legal entity
- Process
- Registration is done online via the Emaratax portal by submitting the relevant documents and turnover declarations
- One company in the Group must be appointed as a representative member
- Each company in the Group will be allotted a TIN and collectively the Group will be allotted a TRN
- If any of the Group company already holds an individual TRN, it will be allowed to be added in the Group basis its TRN and once added, its individual TRN will be suspended
- Key features of a VAT group
- Single VAT TRN for all Group companies
- No VAT on the inter-group transactions for companies within the same VAT group which may create cash flow efficiencies
- Simplified VAT compliance as one consolidated VAT return for all entities part of the VAT Group
- Liability of the VAT group members will be joint and several
- In case of FTA audit, the audit notice will be issued for the group and not individual entities
- De-grouping and De-registration
- If any or all of the Group member ceases to meet the condition at any point, a de-grouping/de-registration application needs to be submitted within 20 business days
- In case number of Group members falls below two, the Group will cease to exist and a de-registration shall be applied. The member entities in such case, shall assess the requirement for holding VAT registration on an individual basis and apply for a registration accordingly.
It is imperative for the businesses to re-assess the existing VAT group structure to ensure that it meets the aforesaid requirements and take appropriate corrective steps (if any) accordingly.