What Is a Sole Establishment Under UAE VAT Law?
A sole establishment is a business owned 100% by one natural person. The law does not see the business and owner as different people. A person can own many sole establishments, but all these businesses are counted together with the owner during tax formalities.
The Federal Tax Authority (FTA) manages VAT rules in the UAE. FTA issues guidance about sole establishments. The FTA wants every business owner to understand these rules and follow them for VAT compliance.
Do Sole Establishments Need VAT Registration?
VAT registration is required if taxable supplies cross a certain limit. FTA sets this limit at AED 375,000 per year for mandatory registration. There is also a lower limit for voluntary registration. You must add the supplies from all your sole establishments to check if you reach the threshold. Once your total taxable supplies cross AED 375,000, you need to register for VAT.
Key Points About VAT Registration
- You should add all business supplies under your name.
- You must register if your supplies go above the threshold.
- You must check this rule for every tax period.
- You can register voluntarily if your supplies are above AED 187,500.
Do I Register Each Sole Establishment Separately?
No, you don’t need to register each sole establishment by itself. The law says you need only one VAT registration as a natural person for all your businesses. You must use your single VAT registration for all sole establishments together.
Is Filing VAT Returns Mandatory for Sole Establishments?
Every VAT-registered person must file VAT returns. This rule covers owners of sole establishments too. You should file returns either monthly or quarterly as per FTA notice. FTA allows you to file returns online through its e-portal.
Do I File a Separate VAT Return for Each Sole Establishment?
You don’t need to file separate VAT returns for each sole establishment. You file just one VAT return for all your businesses together. You should show all business transactions in this return in a consolidated manner. You calculate total tax due or tax refund at the consolidated level.
Important Steps
- File one VAT return for all your sole establishments.
- Add all transactions for every business.
- Pay outstanding VAT or claim a refund together.
What Are the Rules for Owners of Sole Establishments?
Owners of sole establishments must stay updated with FTA guidance. You should always check all businesses before you calculate taxable supplies. You should make sure no business is left out. You should declare all taxable supplies and report any changes to FTA.
If you open a new business, you must review your tax status. You must make sure your business remains compliant with VAT rules.
Owner’s Duties
- Stay up-to-date with FTA updates and clarifications.
- Make sure you count all businesses for VAT registration checks.
- Declare all taxable supplies.
- Correct mistakes and notify FTA as required.
What Happens If You Don’t Follow VAT Rules?
You may get in trouble if you ignore VAT rules. You could forget to count one business or make a mistake in your return. In such cases, you must inform FTA quickly. Voluntary disclosure helps avoid heavy fines. FTA expects you to correct errors as soon as possible.
How Mubarak Al Ketbi (MAK) Auditing Can Help
Are you feeling overwhelmed with your tax and accounting work for multiple sole establishments? Mubarak Al Ketbi (MAK) Auditing has professionals who help business owners like you every day. The team guides you from VAT registration to periodic tax filings. They answer your questions and help you manage tax risks.
Their experts support you with tax planning, compliance checks, return filing, and accounting systems. They keep you updated with new rules and best practices in the UAE. If you’re in hot water, you need someone who knows the ropes!
What Can Mubarak Al Ketbi (MAK) Auditing Do For You?
- Help with VAT registration for sole establishments.
- Assist with VAT return preparation and filing.
- Guide on accounting and compliance matters.
- Review your records for accuracy and risk.
- Train your staff about VAT rules and best practices.
How Can Mubarak Al Ketbi (MAK) Auditing Help You?
If you’re juggling lots of tax tasks and feeling like you’re herding cats, Mubarak Al Ketbi (MAK) Auditing is here to help! Their team will make your business journey smoother and guide you on every step of VAT registration and compliance.
- For more information, visit our office:
- Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Or contact/WhatsApp us at +971 50 276 2132
