A VAT group (tax group) lets two or more related UAE companies register for VAT as one taxable person. The group files one VAT return through a representative member, and supplies between members are ignored for VAT. To qualify, each member must be a legal person established in the UAE, and the members must be related parties, usually with 50% or more common ownership or control.
Source: FTA: Tax group registration
Who Can Form a VAT Group
- Each member is a legal person (such as a company) with a place of establishment or fixed establishment in the UAE
- All members are related parties
- Each member makes taxable supplies or imports relevant goods or services
- The group's total taxable supplies and imports are at least the mandatory registration threshold
Members don't need to be registered for VAT already. Sole establishments and branches can't join as separate members, because they are treated as the same person as their owner.
Source: FTA: Tax group registration
The Control Test
The FTA's tax groups guide says companies are related when one person, or two or more people in a formal partnership, has:
- A voting interest of at least 50% in each company, or
- A market value interest of at least 50% in each company, or
- Control by any other means
Source: FTA: Tax Groups VAT Guide
Benefits and Risks
| Benefits | Risks |
|---|---|
| One VAT registration and one VAT return for the group | All members are jointly and severally liable for the group's VAT debts |
| Supplies between members are ignored for VAT | A member that leaves stays liable for its period in the group |
| Less cash tied up in VAT on large internal deals | Errors by one member affect the whole group |
Source: FTA: Tax Groups VAT Guide
The Representative Member
One member is chosen as the representative member. The group's VAT returns are filed in its name. Each member signs a no-objection letter authorising it to represent the group.
Sources: FTA guide | FTA service
Documents You Need
- A valid trade licence for each member
- Passport or Emirates ID of the authorised signatory, and proof of their authority
- A signed and stamped monthly turnover declaration on letterhead, with supporting financial documents
- A signed and stamped group structure, showing the representative member and members
- No-objection letters from each member
- For government entities: a copy of the establishing legislation
Source: FTA: Tax group registration
How to Apply
- Confirm all companies pass the control test and are established in the UAE.
- Choose the representative member.
- Collect the documents and no-objection letters.
- Apply for tax group registration on EmaraTax.
- The FTA says the application takes about 45 minutes, and it reviews a complete application in 20 business days.
Source: FTA: Tax group registration
New to VAT? See our VAT registration guide and tax invoice requirements.
Frequently Asked Questions
What is a VAT group in the UAE?
Two or more related UAE companies registered as one taxable person, filing one VAT return.
What ownership is needed to form a VAT group?
At least 50% voting or market value interest held by the same person or partnership, or control by other means.
Can a branch join a VAT group?
No. Branches and sole establishments are treated as the same person as their owner.
Are supplies between group members taxed?
No. Supplies between members are ignored for VAT.
What is the main risk of a VAT group?
All members are jointly and severally liable for the group's VAT debts, even after leaving for their period of membership.
Note: This article provides general information only and is not tax advice. Confirm the current requirements with the Federal Tax Authority or a qualified tax professional.