The GCC agreement for the VAT Implementation has inherited a typical feature called as Tax Group Registration from the European Union model. While looking at the VAT Laws of the UAE and KSA which already published in the public domain, it apparently seems that these laws have got clear indication of legal and procedural aspects of the Tax Group Model.
To understand the basics of the VAT coming in GCC region, refer to our article http://apmh.in/Knowledge/Blogs/introduction-of-vat-in-gcc-countries
This feature has become one of the points of decision making for most of the Arabian investment groups which typically own and invest in multiple businesses developing in different entities with common management and control. This will also be a question for the professionally managed multinational companies who have over a period of time de-merged different businesses in different entities with common overall ownership for convenience of management and growth of independent profit centers.
Let’s understand the “who” and “why” of this tax group registration from a VAT impact analysis stand point….
As per the article 10 of KSA VAT Regulation and article 14 of the UAE VAT decree Law no. 8, Entities fulfilling the below criterion become eligible to tax group registration
Here is our article useful registration process and formalities under the UAE VAT http://apmh.in/Knowledge/Blogs/uae-online-registration-for-vat-now-open
From the above backdrop, whether the entities fulfilling all the conditions can be selectively made the part of the group or kept out as the case may be from tax optimization or planning angle? This needs to be thought of.
Basis the above understanding CFO or CEO or the management can assess the cost benefit of going under a tax group registration and take the step forward in that direction.
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