VAT Registration of Sole Establishment in UAE

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VAT Registration of
Sole Establishment in UAE
Parsh Accounting and Bookkeeping
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A person having different business establishments
can follow the provisions of sole establishments
under UAE VAT law to optimize their time and
efforts in completing the tax-related functions.
Federal Tax Authority has published specific
guidance with respect to sole establishments
which is further discussed in detail below.
Introduction
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Sole-establishment
A sole establishment is explained in other words
as a sole proprietorship that is 100 owned by a
natural person. The type of ownership legally
allowed for business and the sole establishment
does not carry another legal identity different
from its owner. A natural person can own more
than one sole establishment and all the sole
establishments under a natural person put
together will be considered as the same as the
natural person when tax formalities are
considered.
under UAE VAT-law
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Is VAT registration mandatory for
sole-establishments?
The requirement for VAT Registration in Dubai
depends upon the volume of taxable supplies and
FTA has specified threshold limits for both
mandatory and voluntary tax registrations. Any
natural person owning sole establishments are
liable to assess the volume of his/her taxable
supplies, considering all the establishments
together, to compare with the registration
thresholds. Once the aggregated amount of taxable
supplies of all the sole establishments exceeds
or is expected to exceed the mandatory
registration threshold which is AED 375,000 per
annum, VAT registration should be obtained.
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A natural person owning multiple sole
establishments required to obtain only one VAT
registration on the behalf of all his
establishments. Hence separate registration is
not required for each of the sole
establishments.
Is it Mandatory for each of the sole
establishments to register for VAT separately?
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Is VAT return filing in Dubai mandatory for
sole establishments?
All Entities under VAT-registered include
registered natural persons who have sole
establishments should file the periodic VAT
returns with FTA. Whether to file the VAT return
monthly or quarterly will be as notified by
Federal Tax Authority, once registered. A
registered person can filled VAT returns using
the e-portal service facilitated by FTA.
For further clarifications regarding the filing
of VAT returns, feel free to contact Parsh.
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Should each one of the sole establishments
file a VAT return separately with Federal Tax
Authority?
Once VAT registered, all of the sole
establishments of a natural person will be
assessed together as one taxable entity and
hence separate VAT returns are not required.
Each registered entity under VAT laws can submit
one VAT return for every tax period as
applicable and declare the transactions of all
his/her establishments in a consolidated manner.
Outstanding tax payable or refund due shall also
be calculated in this consolidated level based
on the declared amounts of transactions in the
VAT return.
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Instruction to be followed by
the owners of sole establishments?
Owners of sole establishments are expected to
remain updated about the clarifications
Regulations issued by FTA on registration and
reporting requirements of sole establishments.
They required to ensure all their sole
establishments are considered while evaluating
whether the number of taxable supplies in
aggregate reaches the mandatory registration
threshold. They required to ensure that there
are no undeclared taxable supplies and in case of
any outstanding VAT corrections, Federal Tax
Authority shall be notified on time as specified
in the tax regulation. Especially while
incorporating new establishments, tax regulatory
responsibilities should be revisited to ensure
compliance with the requirements in every aspect.
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Outcomes of non-compliance with the VAT
registration in Dubai and reporting requirements
relating to sole establishments

• It is always recommended to VAT Consultant to
  ensure compliance with the regulatory
  requirements. What if a natural person omits or
  forgives the responsibilities regarding
  registration and reporting? it can be some
  circumstances where a person skipped to consider
  one of his sole establishments while evaluating
  the taxable supplies to compare with the VAT
  registration threshold or another framework of
  wrong calculation of outstanding VAT payable. In
  any such situation, the natural person shall
  notify Federal Tax Authority through voluntary
  disclosure or other procedure as applicable to
  prevent any non-compliance with the tax
  accounting and to avoid further consequences
  such as penalties.

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How Parsh can help you in tax and accounting
related activities of your sole establishments?
Are you getting overwhelmed with managing your
multitudinous business concerns and their
respective regulatory requirements? Parsh has
dedicated professionals in each of the
competencies such as accounting, tax, audit, and
compliance who can assist you in carrying out
your business transactions in a systematic and
controlled environment. We have subject matter
experts who can guide you in understanding and
fulfilling your regulatory responsibilities
starting from registration to periodic reporting
to the authorities.
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Hope you have a clear idea of the implications of
VAT registration for UAE sole establishments.
Still, you have queries regarding VAT
registration of sole establishment in Dubai?
Contact Parsh, we are happy to discuss with you
the recent developments in the context of tax
rules and provide you with insights on
implementing the best practices in the region.
Contact Us
971-568511542
info_at_parsh.ae www.Parsh.ae