Two or more Persons can opt to register as a Tax Group if it can be established that they are in association as a result of their economic, financial and regulatory practices in Business, the FTA may register them as a Tax Group after considering the individual circumstance of each case.
A Tax Group shall select one of its registered members to act as the representative member of this Tax Group. A request to register a Tax Group shall be made by the representative member of that Tax Group. The Authority should make a decision regarding any application submitted for registration of two or more Persons as a Tax Group within the period of 20 business days starting with the day on which it was received by the Authority.
Where a request to form a new Tax Group is approved, the Tax Group registration shall be in effect according to the following:
- From the first day of the Tax Period following the Tax Period in which the application is received;
- From any date as determined by the Authority.
The Authority may refuse the application for registration as a Tax Group, in any of the following cases:
- The Persons do not meet the requirements for Tax Group registration in accordance with the provisions of the Decree-Law and Article (9) of this Decision.
- Where there are serious grounds for believing that if the registration as a Tax Group is permitted, it would enable Tax Evasion or significantly decrease Tax revenues of the Authority or increase the administrative burden on the Authority significantly;
- Where any of the Persons included in the application is not a legal Person.
- Where one of the Persons is a Government Entity specified under Article (10) and (57) of the Decree Law and the other is not.
- Where one of the Person is a Charity under Article (57) of the Decree-Law and the other is not.
The Authority may reject adding a Person to a Tax Group where that Person does not meet the requirements for Tax Group registration in accordance with the provisions of the Decree-Law or for the reasons mentioned above.
The Authority may only register a Person as part of a Tax Group under Clause (7) of this Article if the two following conditions are met:
- The Person’s Business includes making Taxable Supplies or importing Concerned Goods or Concerned Services.
- If all the Taxable Supplies or imports of Concerned Goods or Concerned Services of the Business by Persons carrying on the Business would have exceeded the Mandatory Registration Threshold.
The Authority may reject the application of registration as a Tax Group if there are serious grounds for believing that registering the Related Parties would significantly decrease Tax revenue.
Amendments to a Tax Group
The representative member appointed under Article (10) executive regulation cabinet decision 52 may apply to the Authority to do any of the following:
a. Add another Person to become a member of the Tax Group.
b. Remove one of the members of that Tax Group.
c. Nominate another member of the Tax Group to be the representative member with the consent of the other member.
d. Deregister that Tax Group.
For the purposes of Clause (1) of this Article (11) executive regulation cabinet decision 52, the Authority may accept the request mentioned in the application from either:
- The first day of the Tax Period following the Tax Period in which the application is received;
- Any date as determined by the Authority.
Any Notification by the Authority, which is addressed to the representative member of any Tax Group shall be deemed to be served on the representative member and all other members of that Tax Group.
- Executive regulation cabinet decision 52, Article (12) states that registration of Persons as a Tax Group shall result in the following:
- Any Business carried on by a member of the Tax Group shall be deemed to be carried on by the representative member and not by any other member of the Tax Group.
- Any supply made by a member of the Tax Group to another member of the same Tax Group may be disregarded.
- Any supply, taxable or otherwise, by a member of the Tax Group shall be deemed to be made by the representative member.
- Any Import of Concerned Goods or Concerned Services by a member of the Tax Group shall be deemed to be an import by the representative member.
- Any supply of Goods or Services to a member of the Tax Group from a Person who is not a member of the Tax Group is a supply to the representative member.
- Any Output Tax charged by a member of the Tax Group shall be deemed to be charged by the representative member.
- Any Input Tax incurred by a member of the Tax Group shall be deemed to be incurred by the representative member.
All members of the Tax Group shall remain personally and jointly liable for any Payable Tax of the representative member.