This official FTA guide provides comprehensive guidance on the formation, amendment, and disbandment of VAT tax groups in the UAE. It clarifies the provisions of the VAT legislation, outlining the key implications, such as treating the group as a single taxable person, disregarding intra-group supplies, and issuing one TRN. The document details the strict eligibility criteria for members, covering business, legal personality, UAE establishment, and related party control requirements. It also specifies additional rules for Government Entities. Furthermore, the guide explains application procedures and the joint and several liability of all members for the group's VAT obligations.
Tax Groups
VAT Guide VATGGR101
May 2018
Contents
1. Tax groups – Guidance Note
1.1. Overview
1.1.1. Short brief
1.1.2. Purpose of this document
1.1.3. Who should read this document?
2. Tax groups
2.1. Implications of grouping for VAT purposes
2.2. Eligibility to form a tax group
2.2.1. Business criteria
2.2.2. Legal person criteria
2.2.3. Establishment criteria
2.2.4. Related parties (and control) criteria
2.3. Government Entities
2.3.1. Additional criteria for Government Entities
2.4. Forming and amending a tax group
2.4.1. Forming a tax group
2.4.2. Applying to form a tax group
2.4.3. Making changes to a tax group
2.4.4. Applying to make changes to a tax group
2.5. Anti-avoidance
2.5.1. Refusal of applications
2.5.2. Restrictions on tax grouping
2.5.3. Forced tax grouping
Appendix A - Deciding whether you may form a tax group
Tax groups – Guidance Note
Overview
Short brief
Tax grouping for VAT purposes is an administrative easement available to businesses and a revenue protection measure for government:
Creating a tax group has the effect of registering a single taxable person.
A tax group is issued one VAT Tax Registration Number (TRN) for use by all group members, and only one tax return is required for all group members.
Transactions taking place within a tax group are generally disregarded for VAT purposes, meaning that cash-flow or absolute VAT costs that might otherwise be suffered by the businesses concerned are eliminated. Moreover, revenue risks that might otherwise arise on significant intra-group transactions are also eliminated.
Strict qualifying criteria must be applied to limit the use of the measure to those for which it is designed i.e. it is an administrative simplification measure, not one designed to enable tax avoidance at any level.
Purpose of this document
This document contains more detailed guidance for businesses interested in forming a tax group, adding members to or removing members from an existing tax group, and disbanding a tax group.
Who should read this document?
This document should be read by all persons seeking to understand whether or not they are eligible to form a tax group, how to amend a tax group, and how to disband a tax group. It should also be read by those who are part of a tax group so as to understand their associated obligations.
Tax groups
Implications of grouping for VAT purposes
Continue Reading
Access Full Content
You're viewing a preview of this document. Please log in to unlock the complete content, annotations, and research tools.