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What you need to know now
VATP026 replaces VATP021. Sole establishments belonging to the same person are considered together for VAT registration.
- Multiple trade licences do not necessarily mean multiple taxable persons.
- Identify the legal owner before testing turnover.
- Resolve duplicate registrations through the FTA process.
Begin with legal ownership
A sole establishment is not necessarily a separate person from the individual or other person owning it. Before reviewing registration, map each trade licence to the legal owner and identify the activities carried on under it. Several trading names can therefore belong to one owner even where the activities or locations differ. The current clarification is VATP026, which replaced VATP021; retain the older article as background to that clarification history.
Prepare an owner-level activity schedule
List the establishments, licence numbers, activities, start dates and any existing VAT registrations. Reconcile the relevant sales and imports across the owner’s activities, using underlying transaction records rather than only the turnover stated on a licence renewal form. Separate genuinely different legal persons before aggregating amounts. This prevents the opposite mistakes of treating every licence as a separate threshold test or combining companies simply because they share shareholders or management.
Resolve inconsistent registrations carefully
If the same owner has more than one existing registration, do not cancel a number or move invoices solely on the strength of this summary. Prepare the ownership and transaction evidence and follow the FTA process for the specific account position. Identify outstanding returns, balances and historical invoices attached to each number. Keep the resulting FTA instructions and effective dates so the business can explain how the registration records were corrected.
Keep billing and records aligned
Once the correct registration position is established, update invoice templates and supplier instructions consistently across the establishments. Reconcile the consolidated VAT working papers back to the separate business ledgers so each activity remains understandable. When another licence is added or ownership changes, revisit the legal-person mapping before using an existing number. A practical control is to maintain one register linking each trading name and licence to its owner, VAT account and accounting records. Include discontinued licences in the historical mapping where their transactions remain relevant, rather than considering only the licences active on the date of review.
YOUR NEXT STEPS
A practical way forward
- 01
Step 1
Map each licence to its legal owner.
- 02
Step 2
Aggregate the relevant activities for the registration assessment.
- 03
Step 3
Keep licences and ownership data consistent in the account.
CLEAR ANSWERS
Frequently asked questions
Is VATP021 the latest clarification?
No. It was replaced by VATP026.
Can each sole establishment of the same person register independently?
The FTA clarification requires one registration for those establishments.
Earlier article & background First published 13 October 2020 · retained for context
This earlier article is preserved for context. Its rates, deadlines, approvals and announcements may have been superseded. Use the current guidance and official references on this page for your next step.
Clarifications on VAT Registration of Sole Establishments: FTA releases Public Clarification on VAT registration of Sole Establishments.
A natural person may own a number of sole establishments and there has been uncertainty on VAT registration of these establishments.
The Federal Tax Authority, UAE, has released a new public clarification ‘VATP021’ addressing the VAT registration of “Sole Establishments.’ The key points of this clarification are:
- As per Law since each person can only obtain one VAT registration, the natural person should include all of his sole establishments under one VAT registration. The sole establishments are not eligible to get registered separately;
- VAT registration should be obtained in the name of the natural person that owns the sole establishments. However, if a natural person, owning multiple sole establishments, wishes to obtain the VAT registration in the name of one of its sole establishments, the FTA will consider the request;
- While evaluating the VAT registration threshold, the taxable supplies by a natural person, as well as his sole establishment must be considered collectively to determine the VAT registration obligations.
- If different sole establishments of a natural person have already received separate VAT registrations in the past, FTA will review such registrations in certain cases and will inform the relevant taxable persons of the corrective steps they should take, if any. No action need be taken for amending the existing registrations until specifically directed by the Federal Tax Authority (FTA);
- All future registration applications of Sole Establishments should adhere to this public clarification, i.e., they should be collectively registered under the name of the owner itself;
- The above clarification does not apply to one Person Company LLC or other similar legal entities that are seen as distinct and separate legal persons from their owners.
VERIFY THE DETAIL
Official sources & further reading
Source checks support this general guide. Your treatment depends on the facts, tax period and applicable legislation.
