Disbanding a VAT tax group or removing a company? If
intercompany balances aren’t handled before the exit, it could cost you
thousands in unexpected VAT liabilities.
Let’s break it down.
1. Unsettled Intercompany
Transactions = Taxable Supplies
Once a member leaves, they become a separate taxable person.
✅ Example:
- Delta
Interiors owes Delta Steel AED 200,000 before leaving the group
- After
exit: ✅ Must charge 5% VAT = AED 10,000 due
2. TRN and Invoicing Must Change
Old TRN = Deactivated New TRN must be used from day one
post-exit.
❌ Risk:
- Using
group TRN post-exit = AED 5,000 penalty/invoice
- No
input VAT recovery without correct TRN match
- Close
intercompany balances
- Transfer
inventory legally & document delivery
- File
for VAT registration before effective removal date
- Clean
up before you split up: document, invoice, and register correctly
- FTA
sees unpaid intercompany balances as taxable supplies
- Post-exit,
you’re a separate VAT entity — act like it
- Exit
planning for VAT tax groups
- New
TRN registrations & ERP support
- Invoice
trail reviews to ensure audit-readiness
Let’s keep your VAT compliance clean — even when the group
doesn’t last.
