Emirates Information Company – FTA points public clarification relating to VAT registration of ‘distinctive institutions’


ABU DHABI, February 9, 2021 (WAM) – The Federal Tax Authority (FTA) has clarified {that a} pure individual with quite a lot of distinctive institutions can solely receive one tax registration for all their distinctive institutions, and never a report for every institution individually.

The ALE has indicated {that a} single institution (additionally referred to as a sole proprietorship) is a authorized type of enterprise that’s 100% owned by a pure individual, and {that a} single institution doesn’t have a authorized persona unbiased of its proprietor. , as a single institution and its proprietor are thought of the identical individual.

This announcement was issued as a part of a brand new public clarification relating to the registration of “unique institutions for VAT functions beneath the general public clarification service supplied on the FTA web site. These public clarifications purpose to familiarize folks with tax elements that require simplified explanations, permitting them to use tax ideas with precision and effectivity.

The FTA has acknowledged that this public clarification doesn’t apply to a one-person LLC or different comparable authorized entities, that are thought of separate authorized individuals and separate from their homeowners (except relevant regulation deal with this entity and the pure individual because the individual). For the avoidance of doubt, it ought to be famous {that a} authorized individual (for instance an organization) can’t be the proprietor of a single institution.

The AFC defined that in some instances taxpayers’ tax data are reviewed with respect to single institutions and these people shall be suggested of corrective motion to be taken, if vital.

The AFC emphasised that taxable provides made by a pure individual, along with his or her sole institution (s), should be thought of collectively with the intention to decide whether or not the individual has exceeded the brink for obligatory registration at VAT of 375,000 AED.

The FTA has indicated that any registrant should notify the AFC of any unreported exit tax by submitting a voluntary disclosure in accordance with Federal Tax Procedures Legislation No. 7 of 2017, for instance when the registrant has failed. not taken into consideration solely his institutions or his private capability for VAT functions. This consists of instances the place an individual has not registered for VAT on the grounds that the obligatory VAT registration threshold has not been independently exceeded by that pure individual or his or her sole institution (s).

The FTA additional defined that it required the pure individual to tell the Authority if that they had not registered for VAT and to take the required corrective measures to take account of any unpaid VAT.

WAM / Esraa Ismail / Hazem Hussein



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