Meaning of Sole Establishment A business that is 100% owned by a person. A sole establishment does not have a legal personality that is independent of its owner and is accordingly considered to be the same person as to its owner. It should be noted 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. VAT registration Obligations of Sole Establishments: A person may own a number of sole establishments, which may undertake different lines of business.
  • A person should include all its sole establishments under one VAT registration (One TRN No). Therefore, separate VAT registrations should not be sought for the different sole establishments
  • If a person owns one or more sole establishments, the value of supplies made by the person and all its sole establishments must be combined to assess whether the VAT registration threshold has been exceeded.
VAT registrations of sole establishments review: The FTA noted that there are some instances where a person may have received separate VAT registrations for different sole establishments. The FTA also stated that it will review such VAT registrations in certain cases and inform the relevant registrants of the corrective steps they should take if any. For any VAT registrations received in the past, no action is required to amend the VAT registrations, until specifically any direction by the FTA. For all future VAT registration applications, the applicants must confirm the position stated in this Public Clarification. And if a registrant disregarded any of his sole establishments or his own taxable supplies for VAT purposes (for example, on the basis that the sole establishment or his taxable supplies did not reach the VAT registration threshold on a stand-alone basis), the registrant is required to inform the FTA of any undeclared output tax by submitting a voluntary disclosure.

Source: Federal Tax Authority