VAT Registration of Sole Establishments

Individuals and Establishments VAT Taxpayers

A natural or legal person may own several sole establishments. There has been uncertainty on whether each sole establishment needs to obtain a separate VAT registration or whether all such establishments should be included under one VAT registration.

A person owning a number of sole establishments should obtain only one VAT registration for all its sole establishments. It is not permissible to register each sole establishment separately for VAT.

An essential update by the clarification is that, for VAT purposes, a One-Person Company LLC or other similar entities are not considered sole establishments and are seen as a distinct and separate legal person from their owner (unless the relevant applicable legislation state otherwise).

VAT registration obligations of Sole Establishments:

A person may own a number of sole establishments, which may undertake different lines of business.

On the basis that a sole establishment does not have a legal personality that is independent or different from its owner and can obtain only one VAT registration, a person should include all its sole establishments under one VAT registration. Therefore, separate VAT registrations should not be sought for the different sole establishments of the same owner.

The VAT registration in such cases should be obtained ideally in the name of the person that owns the sole establishment(s). However, suppose a person owning multiple sole establishments, wishes to obtain the VAT registration in the name of one of its sole establishments. In that case, the person may apply to the FTA accordingly.

It is important to note that the taxable supplies by a person and his sole establishments must be considered collectively to determine the VAT registration obligations.

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