It is well-known that the UAE has been considered as a favourable destination by entrepreneurs, business owners, freelancers. The region provides a platform for business organizations to establish their roots and grow to national and international level. The UAE stands as a member of the GCC countries, and an important step was taken forward to implement VAT to all GCC nations. This became a compulsion for all the business entities to enter into VAT transactions and pay tax accordingly. The concept of Tax Group came into existence which eases the process for business entities. However, the situation might arise where companies want to de-register the tax group. This article focuses on the same and will provide you with complete information regarding the necessary steps involved in de-registering a tax group. If you are a business owner and is included in the tax group, then this article is for you.
Gist About Tax in the UAE
On 1st Jan 2018, the Government of UAE has successfully implemented the VAT at 5% intending to diversify the revenue source. The tax in UAE has been considered as a successful move as it ends improving businesses to a great extent. This enables all the business entities available in the UAE to enter into VAT transaction at every stage, and Tax Audit at a later stage.
Tax Group in a Nutshell
The concept of tax group came into existence to help business entities to pay their tax. In a tax group, two or more business entities form a group to get categorized under the same tax group, which helps them to share the tax %. There exists a possibility that once a company enters into a tax-group, they might want to amend or de-register it. Let’s have a look at the possible reasons that might lead a business entity to amend a tax-group.
Reasons for Deregistration of Tax Group
Some of the possible reasons for the de-registration of a tax group are stated below:
- The person registered as a tax group no longer meet the requirements for registering a tax group
- If the person no longer has an association with economic, financial or any regulatory practices
- If it can be proved on serious grounds that further continuation of the tax group registration can lead to tax evasion
- If a new party is to be added in the tax group whose business activities are a part of the business conducted by the tax group.
Steps to be Followed while De-Registering a Tax Group
While de-registering a tax group in the UAE, the following steps are to be followed:
- A Representative Member needs to notify the Federal Tax Authority
- If FTA decides to de-register, a notice will be sent within 10 business days
- In case if no taxable person remains a member of the group, the FTA will issue a new Tax Registration Number or reactive the TRN issued earlier
- The person will be treated as a registrant immediately following the time of leaving a Tax Group
Dealing with the deregistration process of a Tax Group can be confusing. If you are looking for assistance to simplify the process, the best option is to have a word with top tax agent in the UAE. Experts can help you understand and deal with the process in a simple and error-free way. If you are looking forward to a tax guide, then we have got you one.
JAXA Can be Your Tax Guide
JAXA is a regulated tax consultant in the UAE who is specialized in dealing with the tax process of its clients. Our tax experts can help you with any tax-related issues and can guide you in the de-registration of Tax Group. We stand as ISO 9001-2015 certified and offer services in Auditing, Accounting, Tax, VAT, Feasibility Studies etc. and are dedicated to providing customized solutions to our clients. To know more, do contact us-we’d be glad to assist.