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What Is The TAX Group In UAE?

12/11/2021

Two or more people operating companies in the UAE can apply for tax registration as a tax group in UAE. A tax group is the group of two or more individuals who may have enrolled as a single taxpayer with the FTA and are liable to the UAE VAT Law's requirements. When a group of two or more legal persons acquires tax registration status from FTA as a single taxable person, they constitute a tax group. The only rationale for the formation of this organization is for tax considerations.

Requirements for Using VAT Group Registration

You must meet all of the following conditions to be eligible to apply for VAT Group registration:

  • To be eligible to qualify as a tax group, all possible applicants must be legal entities that conduct taxable business operations.
  • They must have a primary/fixed business presence in the UAE.
  • The prospective candidates must be related parties, & their combined taxable supplies will surpass the statutory registration threshold.
  • A person can only have one TRN (Tax Identification Number) at any one time.
  • A person who is a member of a registered tax group is not allowed to hold another TRN, either individually or as part of another taxed group.

Benefits of Group VAT Registration

The benefits of VAT group registration for businesses are as follows:

  • For VAT purposes, all the entities in a VAT Group are classified as 'ONE' entity. This would simplify VAT accounting for firms, as well as compliance reporting such as VAT returns, which must be produced & filed at the group level rather than at the entity level.
  • VAT does not apply to any supply made within a VAT group's firms. This means that there will be no VAT applied to supplies made between VAT group members. On the other hand, supplies made by a VAT group to a non-VAT group company, are VAT-exempt.

Is It Possible To Reject A Tax Group Registration Application?

Certainly, there is a chance that the authorities will reject your application for registration as a tax group. The following is a list of situations covered by the VAT regulation that will reject the application for tax group registration.

  • > The applicants do not match the above-mentioned standards for tax group registration.
  • Due to this registration, any possibility for tax avoidance is identified.
  • If it is discovered that any of the individuals in the intended group are not legal people.
  • If it is discovered that one of the proposed group members is a government body.
  • If it is discovered that one of the proposed group members is a charity worker.

When it comes to apparently combine as one in order to reap the benefits of a tax group, it's a difficult option to perform. It is certainly advisable for businesses to get legal guidance & assistance from a tax specialist before making decisions that will have a long-term impact on their business. Well, if you are in search of the best professionals for UAE VAT tax group registration services, then we at ARC Associates can be your best partner for this. Being the top company providing reliable VAT registration services in UAE & other business-related services, we can assist you in completing the application to register as a tax group in UAE. As well as guide you through what information you need to have on hand to complete the application. Apart from this, we can manage all of your business needs with complete transparency and precision, according to your demands. So, if you'd like to know more about our services, contact our specialists today—we're always delighted.