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May 15, 2026

This Public Clarification clarifies the Value Added Tax (VAT) registration obligations for a person owning multiple sole establishments. It mandates that a single VAT registration must be obtained for the owner and all their sole establishments combined, as a sole establishment is not a separate legal personality. It is not permissible to register each entity separately. The value of all taxable supplies made by the person and their establishments must be aggregated to determine if the mandatory registration threshold, as per Article 19 of the VAT Decree-Law, has been exceeded, requiring corrective voluntary disclosures if necessary.

VATP026

VAT Public Clarification

VAT registration of 'Sole Establishments'

Please be informed that Public Clarification VATP026 replaces Public Clarification VATP021.

Issue

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.

This Public Clarification clarifies the VAT registration obligations of a person in respect of its sole establishments. Note that the term “person” refers to a natural or legal person.

Summary

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.

The Federal Tax Authority ('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.

Detailed discussion

Meaning of Sole Establishment

A sole establishment (also referred to as sole proprietorship) is a form of business which is 100% owned by a person. A sole establishment does not have a legal personality that is independent of its owner, and is accordingly considered to be the same person as its owner. It should be noted that, for VAT purposes, a One-Person Company LLC or other similar entities are not considered sole establishments, and are seen as a distinct and separate legal person from their owner (unless the relevant applicable legislation state otherwise).

VAT registration obligations of Sole Establishments

A person may own a number of sole establishments, which may undertake different lines of business.

On the basis that a sole establishment does not have a legal personality that is independent or different from its owner, and that each person can obtain only one VAT registration, it is hereby clarified that a person should include all its sole establishments under one VAT registration. Therefore, separate VAT registrations should not be sought for the different sole establishments of the same owner.

The VAT registration in such cases should be obtained ideally in the name of the person that owns the sole establishment(s). However, if a person owning multiple sole establishments, wishes to obtain the VAT registration in the name of one of its sole establishments instead, the person may apply to the FTA accordingly.