The organizations that hold so many licenses under one company are treated as a single party. This is because of so many branches of that company run. Some of the branches have their own ownership while some might be in some sort of fractured form. All of these branches work under the supervision of one main head and that is why the organization is said to be a one entity having multiple licenses for multiple purposes.
VAT in UAE
While considering VAT in this condition, we come to know that those organizations that have so many branches and other related things are said to be one entity when it comes to registering for VAT. This is because no matter how many branches of a company, as a whole the company is just one under which all of those branches are working. So, we cannot say that all of those companies are different and have individual identities. They will all be considered as ONE.
No charges within the companies
While doing transactions between one another, the branches of one company will not have to pay tax. This is because they are all one and do not have any separate entity. This is such a positive aspect of the VAT. This gives some kind of a relief to the owner as he has not had to pay the tax for all of the branches instead he will pay the VAT for all the branches as a whole and not separately.
When can you register for VAT?
VAT registration in UAE can be done at any moment. Registering on time would be a better idea indeed. Delaying can cause you penalties
There are some negative aspects of VAT as well. at first, we saw that several branches under our control are considered to be ONE but in case of VAT grouping, after the implementation of the VAT, the FTA will consider all the multiple entities separate.
The FTA will check the progress of all the multiple entities and will probably do their audit as well. this will be done to see if the government is getting benefitted or not. The FTA will also keep an eye on all the matters. it will look if all the matters in order or not.
Transactions within the groups- no VAT
Power of FTA
So many people are unaware of the power of FTA. they do not have the slightest idea that FTA can shut down their businesses if they are found guilty.
Must you be thinking guilty as in? well, if someone is generating income more than the threshold for VAT, the VAT will punish it. Non-compliance with the rules of FTA can take you in trouble. so, it is better to follow the rules rather than breaking them and getting in trouble. if rules have been made, they have been made for everyone that comes under the category. If someone will try to con the authorities, he will get punished in one way or the other. If you have any questions about VAT, Visit registered tax agent here : https://farahatco.com/services/tax-agent-uae/
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