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Group Registration

What is a VAT Group Registration ?

According to the UAE VAT Law, two or more persons conducting businesses may apply for Tax Registration as a tax Group. A tax group is a group of two or more persons registered with the FTA as a single taxable person subject to fulfillment of conditions under UAE VAT Law.

What are the Conditions for applying VAT Group Registration ?

To be eligible for applying VAT Group registration, all of the following conditions need to be fulfilled.

  • Each person shall have a Place of Establishment or Fixed Establishment in the State :

    This implies that each person should have either of the below mentioned establishments in UAE :
    • Place of Establishment : The place where a business is legally established in UAE pursuant to the decision of its establishment, or a place in which significant management decisions are taken and central management functions are conducted.
    • Fixed Establishment : Any fixed place of business, other than the place of establishment, in which the person conducts his business regularly or permanently and where sufficient degree of human and technology resources exist which enables the person to supply or acquire Goods or Services. This includes branches, which are also considered as the fixed establishment.
  • The relevant persons shall be Related Parties : Here related parties refers to two or more persons who are not separated on the economic, financial or regulatory level, where one can control others either by Law, or through the acquisition of shares or voting rights.
  • One or more persons conducting business in a partnership shall control the others : This implies that one or more person who are related, controls the other business. For example, officers or directors of one another's businesses, partners in each other's business etc.
What are the benefits of getting registered as a VAT Group ?

The following are the benefits of VAT Group Registration for the business

  • All the entities within a VAT Group will be treated as 'ONE' entity for VAT purpose. This will help the businesses in simplifying accounting for VAT, and also compliance reporting like VAT returns are required to be prepared and reported at the group level instead of entity level.
  • Any supplies within the entities of a VAT group, are out of the scope of the VAT. This means, VAT will not be levied on the supplies between the entities of a VAT Group. However, supplies made by the VAT group to an entity outside the VAT group are subject to VAT.

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