Guide
Leaving the VAT system
We check the conditions, file the VAT deregistration request with the Tax Administration, and carry out the stocktaking with VAT charged on goods on hand and the final VAT return.
Leaving the VAT system is the procedure of being removed from the register of VAT payers, which ends your obligation to charge and report VAT on your turnover. It typically becomes relevant when your total turnover in the previous 12 months has fallen below the statutory threshold, or when you registered voluntarily and want to exit after the mandatory period ends. Deregistration does not happen automatically; it follows a request and a confirmation or decision by the Tax Administration, along with a mandatory stocktaking and VAT charged on goods for which input tax was previously deducted. A correctly handled exit frees you from regular VAT obligations, but missteps lead to extra tax, interest and penalties.
What you should know
- Leaving the VAT system is possible once the conditions for mandatory registration cease, primarily when total turnover in the previous 12 months falls below the statutory threshold, which for most payers is around 8 million dinars.
- A taxpayer who entered the system (including voluntary entry) cannot exit immediately and, as a rule, must remain a VAT payer for at least two years before filing a deregistration request.
- Deregistration does not happen automatically: you file a request with the Tax Administration (electronically, via the ePorezi portal), which runs the procedure and issues a confirmation or decision on removal with the date the obligation ends.
- On the day the VAT obligation ends, a stocktaking is mandatory for goods (inventory, equipment, fixed assets and other goods) for which you used the right to deduct input tax at purchase.
- For those goods VAT is charged, that is, the input-tax deduction is adjusted, so the corresponding amount of the previously deducted VAT is returned to the state, which for equipment and real estate depends on the lapse of the adjustment period.
- For the final tax period you file a closing VAT return (POPDV records and the PP PDV form) that includes that calculation, after which you stop issuing invoices showing VAT.
| Step | What it covers |
|---|---|
| Checking conditions | Total turnover in the previous 12 months and registration date, plus the mandatory period of at least two years. |
| Filing the request | Electronic filing of the deregistration request with the Tax Administration via ePorezi until the confirmation or decision is issued. |
| Stocktaking of goods | Stocktaking of inventory, equipment and fixed assets for which input tax was previously deducted. |
| Charging VAT | Charging VAT, that is adjusting the deduction, with the adjustment period for equipment and real estate. |
| Final VAT return | Filing the last POPDV records and PP PDV return with the calculation included. |
How we handle it
- 01 Checking exit conditions We analyze your total turnover over the previous 12 months and your registration date and confirm whether you meet the deregistration conditions, including the mandatory period of at least two years.
- 02 Preparing and filing the request We prepare and electronically file the VAT deregistration request with the Tax Administration via the ePorezi portal and follow the procedure through to the issued confirmation or decision on removal.
- 03 Stocktaking of goods On the day the obligation ends we carry out a stocktaking of inventory, equipment and fixed assets for which input tax was previously deducted and determine their value.
- 04 Charging VAT on goods on hand We calculate the VAT, that is, the adjustment of the input-tax deduction for the listed goods, taking the adjustment period for equipment and real estate into account, and determine the amount to be returned.
- 05 Final VAT return We compile and file the last POPDV records and PP PDV return with the calculation included, and inform you of the final liability and payment deadline.
- 06 Switching to non-VAT operation We align invoicing and the books for operating outside the VAT system, so that invoices and records carry no charged tax from the removal date onward.
Frequently asked questions
When can I leave the VAT system?
Leaving is possible once the conditions for mandatory registration cease, primarily when total turnover in the previous 12 months falls below the statutory threshold, which for most payers is around 8 million dinars. A taxpayer who entered the system must, as a rule, remain a VAT payer for at least two years before filing a deregistration request.
How do I file a request to be removed from the VAT register?
Deregistration does not happen automatically: you file the request electronically with the Tax Administration via the ePorezi portal, and the Tax Administration runs the procedure and issues a confirmation or decision on removal with the date the obligation ends.
Do I have to pay VAT on inventory and equipment when I leave the system?
On the day the VAT obligation ends, a stocktaking is mandatory for goods for which you used input-tax deduction at purchase, and VAT is charged on those goods, that is the deduction is adjusted, so the corresponding amount is returned to the state. For equipment and real estate this depends on the lapse of the adjustment period, and the calculation enters the final VAT return (POPDV and PP PDV).
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