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  • February 8, 2024
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After mandatory VAT registration, it will be possible to cancel the registration as soon as such right arises

 According to the amendment in Order 996 of the Minister of Finance, in the case of mandatory registration of VAT taxpayers during the tax inspection, in the event of the right to cancel the VAT registration during the same inspection period, the cancellation of the VAT registration will be possible at the time of the occurrence of such right in case of the corresponding consent of the taxpayer.

As it is known, according to the current law, the obligation to register as a VAT payer arises, among other things. Then, if during 12 continuous calendar months, VAT taxable turnover exceeds 100 GEL. According to the old approach of the Revenue Service, if the turnover exceeded 000 GEL during the tax inspection, the taxpayer was registered as a VAT payer in a mandatory manner, and during the same inspection, the VAT registration was not cancelled, even if the turnover fell below 100 GEL during any 000 months after such registration. to be fixed.

As a result of the amendment to Article 47 of Order No. 996 of the Minister of Finance, the order directly states that if, during a tax audit, a taxpayer is required to register as a VAT payer (turnover exceeds 100,000 GEL) and subsequently the right to cancel the VAT registration arises (turnover falls below 100,000 GEL), the person authorized to conduct the tax audit is authorized to address the person with the initiative to cancel the VAT registration, after which, if the taxpayer agrees, the VAT registration will be considered canceled.

This means that if, under the old law, during the inspection of the period from January 2021 to November 2024, for example, in May 2022, the obligation to register for VAT would arise (turnover exceeded 100,000 GEL), the Revenue Service would register the taxpayer as a VAT payer in a mandatory manner from the corresponding date in May 2022 and would not cancel the registration as a VAT payer even if, by the end of the tax inspection period (November 2024), for example, the total of VAT taxable transactions in the last 12 calendar months ending in May 2023 would have fallen below 100,000 GEL.

According to the legislative amendment, based on the example mentioned above, if the taxpayer is conditionally registered in May 2022, and before the end of the tax audit period, i.e. before November 2024, in any month, for example, in March 2024, the turnover of VAT taxable operations during the last 12 calendar months is less than 100,000 GEL - the Revenue Service is authorized to apply to the person with the initiative to cancel the registration as a VAT payer and in case of the taxpayer's consent, the registration as a VAT payer will be canceled before the end of the tax audit period, i.e. from March 2024, which means that if there is a delay in registration, but after that, the turnover exceeds 100,000 GEL within a 12-month period, the Revenue Service will be authorized to remove the taxpayer. from VAT registration, which will allow such taxpayers to pay much less VAT, fines and penalties, despite the delay in VAT registration.

 The said change will come into effect from February 2024, accordingly, after the mentioned period, those taxpayers who are late in registering as VAT payers will be able to take advantage of the mentioned benefit and during the inspection period, request the auditors of the Audit Department of the Revenue Service to cancel the registration as a VAT payer, or turnovers within any 12 months before the end of the inspection period 100 000 will be less than GEL.


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