I have a company that has been VAT registered since the introduction of the tax in January. In June, I opened a new branch of the company in another emirate but have not yet registered that branch for VAT as the turnover is below Dh375,000. Should I register the branch licence once it reaches the voluntary limit of Dh187,500 or wait until it reaches the mandatory registration limit of Dh375,000? BDC, Fujairah
From a legal perspective, a branch is seen as an extension of the main company. Therefore, branches do not need to be registered separately for VAT as they will automatically fall under the main registration you completed in December 2017 ahead of the introduction of the tax in January. Do not consider the branch revenues and costs as separate from the main business; from a VAT perspective these should all be combined. The turnover of the branch is therefore irrelevant when looking at registration thresholds and you should include all taxable revenues and costs from your branch in the next return for your existing Tax Registration Number. There is no need to report that main company and branch separately.
If you have revenues and costs dating back from June you should include them as soon as possible in your next VAT return. Remember, if you under reported the VAT payable by more than Dh10,000, you must submit a separate voluntary declaration to the Federal Tax Authority. If the amount under reported is below Dh10,000, then you can just report it in the next return.
Finally, any transactions between your main company and the branch will be outside the scope of VAT and will not need to be reported on your return. A company and all its branches with the UAE are considered to be one taxable entity.