A natural person may own a number of sole establishments, which may perhaps undertake different lines of business. There has been uncertainty on whether each sole establishment needs to obtain VAT registration separately or whether all such establishments could be included under one VAT registration. This Public Clarification clarifies the VAT registration obligations of a natural person in respect of its sole establishments.

The Federal Tax Authority, UAE, has released a new public clarification ‘VATP021’ addressing the VAT registration of “Sole Establishments.’ A Sole Establishment refers to a sole proprietorship business form that is 100% owned by a natural person and does not have a legal personality that is distinct from its owner and is accordingly considered to be the same person as its owner.

The important points to be noted in the clarification are:

  1. A natural person may own a number of sole establishments. As per Law, since each person can only obtain one VAT registration, the natural person should include all of his sole establishments under one VAT registration and does not require separate VAT registrations for such establishments.
  2. The VAT registration in such cases should be obtained ideally in the name of the natural person that owns the sole establishments.
  3. However, if a natural person, owning multiple sole establishments, wishes to obtain the VAT registration in the name of one of its sole establishments, the person may apply to the FTA accordingly.
  4. While evaluating the Value Added Tax registration threshold, the natural person must consider taxable supplies made by the person and the value of supplies made by all sole establishments under his name collectively. If the collective value exceeds the registration limit, the person has an obligation to get registered.

Review if there are separate vat registrations for different sole establishments

  • The FTA notes that there can be some instances where a natural person may have received separate VAT registrations for different sole establishments
  • The FTA wishes to state that it will review such VAT registrations in certain cases and inform the relevant taxable persons of the corrective steps they should take, if any.
  • Any VAT registrations received in the past, no action is required to amend the VAT registrations until specifically directed by the FTA.
  • For all future VAT registration applications, the applicants must conform to the position stated in this Public Clarification. 


  • It does not apply to a One-Person Company LLC or other similar legal entities, which are seen as distinct and separate legal persons from their owners.
  • A legal person (e.g. a company) cannot own a sole establishment.