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A tax group must include one Representative Member that will be filing VAT Returns on behalf of other (ordinary) group members.
Each Upon registration with the FTA, each tax group is assigned TRN (Tax registration Number) . which will be also used by each group member while they are in the group. A taxable person can hold only one TRN for VAT purposes at any time period. That means that Tax Group members cannot be registered separately or as part of another tax group.
Since the date of registration of a tax group, the VAT returns are filed and VAT payments are made by the member who acts as a representative of this VAT group, that is by Representative Member.
After registration of a tax group with Tax Agency, changes Changes to the registered tax group are allowed : members can be added or removed, Representative Member can be replaced by another member. Members of a tax group jointly have liability for any VAT debts incurred in the period during which they were this group's members.
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Consolidating the VAT Liability
Consolidation of tax liabilities on accounts of the Representative Member is occurred as the result of posting of the tax transactions Tax Transactions listed in the above section.
Transferring VAT liability from a group member
For a Tax Transaction that transfers the VAT amount owed to the FTA by an ordinary group member from this member, the application generates the following journal entries:
GL Account | Debit | Credit |
|---|---|---|
Current VAT Payable |
(Due_Amount) |
Other Operating Expenses
Current Payables - Group | (Due_Amount) |
For a Tax Transaction that transfers the VAT refund amount to be received from the FTA by an ordinary group member, the application generates the following journal entries:
GL Account | Debit | Credit |
|---|---|---|
Current VAT Receivable |
(Refund_Amount) |
Other Operating Income
Current Receivables - Group | (Refund_Amount) |
Accepting VAT liability by the Representative member
For a Tax Transaction that transfers the VAT amount due to FTA that must be accepted by the Representative Member from an ordinary group member, the application generates the following journal entries:
GL Account | Debit | Credit |
|---|---|---|
Current VAT |
Payable | (Due_Amount) |
Current Receivables - Group | (Due_Amount) |
For a Tax Transaction that transfers the VAT refund amount to be accepted by the Representative Member from an ordinary group member, the application generates the following journal entries:
GL Account | Debit | Credit |
|---|---|---|
Current VAT Receivables | (Refund_Amount) |
Current Payables - Group | (Refund_Amount) |
Then, on behalf of the entity that acts as Representative Member, you can generate a VAT Return for the current tax period by using the Taxes > Tax Documents > VAT Returns form and send it to the FTA. Also the Representative Member creates a payment to the FTA or requests a return depending on the sign of the total tax amount.