Page 50 - Focus Group

“Any activity conducted regularly, on 1. Review of activities to determine if the activities

an ongoing basis and independently qualify to enable company for applying status
of taxable person for VAT purposes.
by any Person, in any location,
such as industrial, commercial, 2. Input VAT recoverability for active holding
companies.
agricultural, professional, service or
a. Establish direct and immediate link with its
excavation activities or anything taxable activities in order to identify the amount
related to the use of tangible or of input VAT allowed to be recovered
intangible properties.” b. Apportionment of input vat, which is common
between business and non-business activities.
Though, there is no published guidance issued yet
by UAE Federal Tax Authority for VAT implications
of holding companies but based on above analogy,
which is further substantiated by UAE VAT Public
clarification -VAT P010 on Bank interest and
Dividends. The guide mentions that Dividend
income is a passive income and cannot be treated
as a consideration for supply. So, passive holding
company can be considered as not making any
supplies for VAT purposes.

Some of the important points which should be
considered, while analysing VAT transactions for CA Bhawna Chopra
holding companies, are:

Disclaimer:
This article and/or write ups and/or any of its content shall not be treated as opinion and/or advice in any circumstances of the author(s) and/ or the Chapter. Reader’s to apply their best
judgement in the best interest of their requirement and should seek a formal opinion on any issue.

50 TAX JOURNAL 2020 The Institute of Chartered Accountants of India (Dubai) Chapter NPIO