The VAT Group Registration process involves the formation of a group comprising two or more enterprises with the aim of paying a single tax. Upon registration under the Group VAT scheme, the participating entities receive a unified VAT number and can file a single return. This arrangement enables economically and socially linked persons and enterprises to operate as a single VAT entity.
To form a VAT group, the involved parties must meet the following criteria:
- Each participant must have a fixed establishment in the UAE, which is a location where the company is officially registered or where key management decisions and responsibilities are carried out.
- The relevant stakeholders should have social, economic, or legal connections.
- The advantages of VAT Group Registration for businesses are as follows:
- All businesses within a VAT group are recognized as a single entity for VAT purposes. This simplifies VAT accounting and monitoring tasks, as VAT returns are created and filed at the group level instead of individual company levels.
- Supplies made within a VAT group’s entities are not subject to VAT and are considered as “Out of Scope” or disregarded supplies. However, supplies made by the VAT group to entities outside the VAT group are liable to VAT.
Steps to be followed for VAT registration for tax groups in the UAE:
Step 1: Determine if you need to register for VAT
If your taxable supplies and imports exceed AED 375,000 per annum, you must register for VAT. If your taxable supplies and imports are less than AED 375,000 per annum, registration for VAT is optional.
Step 2: Gather the required documents
The following documents are required for VAT registration:
- Trade license of all entities within the tax group
- Emirates ID of the authorized signatory of all entities within the tax group
- Passport copy of the authorized signatory of all entities within the tax group
- Memorandum of Association (MOA) of all entities within the tax group
- Articles of Association (AOA) of all entities within the tax group
- Financial statements of all entities within the tax group for the last 12 months
- Bank account details of all entities within the tax group
Step 3: Complete the VAT registration form
The VAT registration form can be completed online through the Emaratax website. You will need to provide information about the tax group, including the trade license number and contact details. You will also need to provide information about the authorized signatory for the tax group.
Step 4: Submit the VAT registration form and documents
Once the VAT registration form is completed, it must be submitted along with the required documents. The FTA will review the application and documents and may request additional information if needed.
Step 5: Receive the VAT registration certificate
If the application is approved, the FTA will issue a VAT registration certificate for the tax group. This certificate will contain the tax registration number (TRN) for the tax group, which is required for all VAT transactions.
