VAT Registration for UAE Sole Establishments

VAT registration is a legal requirement in the UAE for taxable persons whose annual taxable supplies and imports exceed AED 375,000. Aside from the statutory registration requirement, taxable persons in the UAE can register for VAT on a voluntary basis if their taxable supply and imports exceed AED 187,500 per year. However, there were some questions about the lone establishments’ VAT registration obligations. The key point was whether a regular person should file a separate VAT registration for each of his sole establishment enterprises because a regular person can conduct many businesses under various sole establishment (sole proprietorship) licenses.

The Federal Tax Authority (FTA) has released a public VAT clarification to clear up any confusion about sole enterprises’ VAT registration obligations. A natural person can file a single VAT registration for each of his sole establishment enterprises in the UAE, according to VAT clarification No VATP021. Sole owners would benefit from the assistance of registered tax agents in Dubai, UAE, who could guide them through the complexities of the registration process.


VAT Registration for Sole Establishment Businesses

A sole proprietorship or sole establishment is a legal structure in the UAE that does not have a separate legal identity from its owner. Different sole establishments for different lines of business can be owned by a natural person. Furthermore, a legal entity, such as a corporation, cannot own a single establishment.

According to the FTA, each person can only register for VAT in the UAE for his solitary establishment. As a result, separate VAT registrations for distinct sole entities owned by the same person should not be requested. The VAT registration should ideally be submitted in the name of the natural person who owns the single enterprises in such instances.

If a regular person wishes to register for VAT under the name of one of their sole establishments, he must submit an application to the FTA. Furthermore, while determining VAT registration responsibilities, a natural person’s taxable supply and the sole establishment should be evaluated together. In the aftermath of the latest public clarification, sole proprietors can use licensed tax agents in Dubai to file their VAT registrations.


What Should Sole Establishments Do?

The proprietors of sole firms are required to, in light of the new VAT clarification,

  1. Check to see if all taxable supplies have been declared.

If a VAT registrant fails to report any undeclared output tax to the FTA, he must submit a voluntary disclosure under Article 10(1) of Federal Law No. 7 of 2017 on Tax Procedures.

  1. Take corrective action in the case of unpaid VAT.

If a natural person fails to register for VAT despite the fact that the total amount of taxable supply exceeds the statutory registration threshold, he must notify the FTA and take corrective action to account for the VAT owed.

  1. Read the VAT Registration in the UAE Clarification.

For all future VAT registration applications, the FTA expects sole establishment owners to follow the Public Clarification.

Get the help of registered tax agents in Dubai

For those who run solitary establishments, the rules regulating VAT registration in the UAE are filled with difficulties. The FTA has effectively cleared the air on the VAT registration process with the latest public clarification, as the Authority indicates that natural persons who own several sole enterprises only need to get one VAT registration for all of their sole establishments. VAT registration in the UAE is a complicated process, especially for sole proprietorships, and it necessitates the help of registered agents in Dubai, UAE. Avail a team of highly qualified tax agents in Dubai who help business owners register for VAT efficiently.

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