Two or more persons conducting business, each with a fixed establishment in the State and related to one another as related parties, may apply to register as a single VAT tax group, and the Authority decides on the application within 20 business days, with all members of the group jointly and severally liable for the tax due from the representative member.
Conditions for Tax Group Registration
The Decree-Law provides that two or more persons conducting business may apply for tax registration as a tax group if the following conditions are met: each person has a place of establishment or a fixed establishment in the State, the persons concerned are related parties, and one or more persons conducting business within a partnership controls the others.
Registration Procedure and the Representative Member
The tax group selects one of the registered persons among its members to act as the representative member, who submits the registration application on its behalf, and the Authority must decide on any tax group registration application within a period of 20 business days from the date it receives the application.
Effect of Registering as a Tax Group
- The business activities of any member are treated as carried out by the representative member, and any supply made by any member is treated as a supply made by the representative member.
- Supplies made between members of the same tax group may be disregarded.
- All members of the tax group are personally and jointly and severally liable for any tax due from the representative member.
Refusing the Application or Amending the Group
The Authority may refuse an application to register as a tax group if the conditions are not met, or if there are serious grounds to believe that the registration would enable tax evasion or reduce tax revenue, and the representative member may apply to add a new member, remove a member, choose another representative member, or cancel the group's registration entirely. Any notification sent by the Authority to the representative member is deemed received by that member and by all members of the tax group.
Illustrative Example
Illustrative example: if a group of related companies has fixed establishments in the State and decides to register as a single tax group, supplies made between them may be disregarded for tax purposes, while their supplies abroad are treated as made by the representative member alone.
Legal References
- Federal Decree-Law No. (8) of 2017 on Value Added Tax — Article (14)
- Cabinet Decision No. (52) of 2017 on the Executive Regulation of Federal Decree-Law No. (8) of 2017 on Value Added Tax — Article (10) and Article (12)
For questions about your specific situation, you can ask the UAE Tax & Legislation Helper on Helpers, or consult a licensed chartered accountant.