In the previous article, we learned about the process of deregistration and deregistration of individual businesses based on value-added tax. In this article, we will learn how to cancel or modify a tax group. A tax group is a group of 2 or more related parties registered as a single taxable person for tax purposes. The main benefit of registering as a tax group is that the supply between members of the VAT group is considered to be outside the scope of VAT, therefore, VAT does not apply. In some cases, the VAT registration of the VAT group should be cancelled or modified. Let us understand the need to cancel or modify the tax group and its process.

What are the options for canceling the tax group in the UAE?

The plan to cancel the tax group is:

One kind. People registered as a VAT group no longer meet the requirements for registration as a tax group

In our VAT group registration article, we discussed the requirements for registration as a tax group. If a person in a tax group does not meet these conditions, the registration of the tax group must be cancelled.

b. These people are no longer connected based on economic, financial and regulatory practices

The condition for registration as a value-added tax group is that these people should be related parties, and one person can control another person by law or by purchasing shares or voting rights. If these people have no such association, the registration of the tax group should be cancelled.

C. There are good reasons to believe that if the tax group registration is allowed to continue, it will lead to tax evasion or greatly reduce the tax payment to the free trade agreement

If the FTA has reason to believe that the tax group is involved in tax evasion or does not comply with the regulations, the FTA can cancel the registration of the tax group.

What is the plan to modify the tax group in the UAE?

The schemes that can modify the tax group are:

One kind. If a person no longer meets the requirements for registration as a tax group, that person should be removed from the tax group

b. A person can be added to the tax group, where it can be proved to the FTA that the person’s activities should be regarded as part of the business carried out by the tax group

The process of canceling registration or modifying tax groups under VAT in the UAE

Logout process

Therefore, persons who are registered as a tax group under the value-added tax should pay attention to the above situation. In this case, it is important to cancel or modify the tax group. The process to cancel or modify a tax group is similar to the process of canceling a single registration.