UAE – FTA points public clarification relating to VAT registration of “ single institutions ”

(MENAFN – Emirates Information Company (WAM)) ABU DHABI, February 9, 2021 (WAM) – The Federal Institution Authority, not 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 particular person, and {that a} single institution doesn’t have a authorized character impartial of its proprietor. , as a single institution and its proprietor are thought of the identical particular person.

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

The FTA has acknowledged that this public clarification doesn’t apply to a one-person LLC or different related authorized entities, that are thought of separate authorized individuals and separate from their house owners (until relevant regulation deal with this entity and the pure particular person because the particular person). For the avoidance of doubt, it must be famous {that a} authorized particular person (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 can be suggested of corrective motion to be taken, if vital.

The AFC emphasised that taxable provides made by a pure particular person, along with his or her sole institution (s), have to be thought of collectively in an effort to decide whether or not the particular person has exceeded the edge 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 Regulation No. 7 of 2017, for instance when the registrant has failed. not taken under consideration solely his institutions or his private capability for VAT functions. This contains instances the place an individual has not registered for VAT on the grounds that the necessary VAT registration threshold has not been independently exceeded by that pure particular person or his or her sole institution (s).

The FTA additional defined that it required the pure particular person 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.


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