If two or more business groups or persons share the same kind of businesses, then they can form a single tax group and it will be treated as single taxable person by the FTA.
Norms for forming Tax Groups
- Every member in the group must be a legal person.
- There must be a fixed establishment or a place of establishment for each person in the UAE.
- All members must be related parties.
- All other members must be controlled by one or more persons in the partnership.
- Each member must be related to each other, they must be related by sharing economic, financial or organisational ties (either in shareholding, voting rights or law).
- Tax group will be treated as a single taxable person for VAT purposes. So, under a tax group: Intra-group transactions will be discarded from all VAT charges. Only one TRN (Tax Registration Number) issued for the group and only one tax return is required to be submitted by the group, over all supplies and purchases made by the group members
- All supplies made and received will be carried out in the name of a member appointed as the ‘representative member’
All the members in the group will be liable for: any and all VAT debts and obligations of the group during the period which they were members. Even if a business leaves the group, they will remain liable for VAT and penalties incurred during their membership.
If you have any doubt in forming Tax Groups, call us on 00971-4-331-2332