Dubai- May 8, 2021:

The FTA (Federal Tax Authority ) issued guidance on the value added tax (VAT) registration for sole establishments and sole proprietorships.

A natural or legal person may own a number of sole establishments. There has been uncertainty on whether each sole establishment needs to obtain a separate VAT registration or whether all such establishments should be included under one VAT registration. The Public Clarification released clarifies the VAT registration obligations of a person in respect of its sole establishments.

A person owning a number of sole establishments should obtain only one VAT registration for all its sole establishments, and it is not permissible to register each sole establishment separately for VAT.

This does not apply to a one-person company LLC or other similar legal entities that are seen as distinct and separate legal persons from their owners.

The FTA will review in certain cases the VAT registrations by taxable persons in respect of sole establishments and will inform them of the corrective steps to be taken, if any.