The UAE’s Federal Tax Authority (FTA) provided on Monday that a single person owning different sole companies is required to gain only one tax registration for all of them, provided they do not have to register for all separately.
The FTA provided in a statement that a sole establishment authoritative document of business which is 100% possessed by a characteristic individual, and it doesn’t have a legitimate character autonomous of its proprietor, as the sole business and its proprietor are viewed as a similar individual.
This statement was provided in a new public clarification in regard to the VAT registration of sole establishments, which provided a 1.3 percent rush to 304,948 at the end of January month-on-month, showing the robust activity of the sector, that recently brings many investors from both inside and out of the country.
The National Economic Register’s recent numbers provided that important specialists gave more than 4,000 new licenses for the sole foundation around the country in January 2021.
As per the statistics, sole proprietorship accounts for almost 41 percent of whole commercial licenses of 740,717 at the end of January.
Abu Dhabi, Dubai, and Sharjah stated for 78.6 percent of the whole sole establishments working in the country.
The FTA statement on tax registration provides to inform people with the help of the tax rule which needs proper explanations, “enabling them to apply the tax principles accurately and efficiently,” the tax authority said.
The FTA explained that the sole ownership rule doesn’t have any significant bearing to a One-Person Company LLC or other comparable legitimate elements, which are viewed as “particular and separate lawful people” from their proprietors (except if the material enactment treats such substance and the common individual as a similar individual). For the evasion of uncertainty, it ought to be noticed that a lawful individual (for example an organization) can’t claim a sole foundation.
In specific cases, charge enrollments by citizens are explored with respect to sole foundations and such people will be educated regarding the remedial measures to be taken, if necessary, the FTA clarified.
The tax authority provided that the taxable provided made by a person, more on his sole establishment(s), must be examined wholly in regard to determine whether the person top the compulsory VAT registration threshold of Dh375,000.
The FTA provided that the registrant must tell the FTA of any undeclared output tax by providing a voluntary showing in regard with Federal Law No. 7 of 2017 on Tax Procedures, like where the registrant ignored any of his sole establishments or taxable supplies made in his personal capacity for VAT purposes. “This includes instances where a person failed to register for VAT on the basis that the mandatory VAT registration threshold was not exceeded on a stand-alone basis by that natural person or his sole establishment(s).”
A characteristic individual is additionally needed to advise the FTA in the event that it neglected to enlist for VAT and make the vital remedial move to represent any exceptional duty.