Cancelling VAT registration: the procedure

Cancelling VAT registration becomes an option when a business owner stops trading, when their turnover falls below the relevant threshold, or when being a VAT payer no longer makes sense for them. The process has its own rules and cannot be completed overnight without meeting the conditions. In this article we go through the procedure, the conditions and the consequences you need to reckon with, so that nothing takes you by surprise when you deregister. Cancelling your registration is not simply the reverse of registering, but a separate process with its own obligations, which must be met before it is completed.

When registration can be cancelled

Registration can be cancelled voluntarily once the conditions are met, for example after turnover falls below the set threshold over a certain period. In some cases the tax office cancels the registration on its own initiative, for example when a business ceases trading or repeatedly breaches its obligations. Check the specific thresholds and conditions in the current version of the law, as they change and cannot be treated as permanent figures.

How to apply

You apply for cancellation to the tax administrator, who assesses whether the conditions for cancellation are met. It is worth attaching documents on your turnover and activities to the application, so that the office can assess the situation more quickly. It then sets the date on which the registration is cancelled and from which you cease to be a VAT payer, with all the rights and obligations that entails, including charging tax on your invoices.

Settlement on cancellation

When your registration is cancelled, you are obliged to settle the tax on assets for which you claimed an input VAT deduction and which you still own on the date of cancellation. The point is that you should not leave the VAT payer regime with an unjustified tax advantage from assets you acquired with a deduction. This settlement is often an unpleasant surprise for business owners, because it creates a tax liability without them receiving any actual money for the assets.

• stocks of goods in the warehouse
• tangible and intangible assets for which a deduction was claimed
• advance payments and unsettled supplies

The VAT payer’s final obligations

For the last tax period you file a regular return and the related statements, and include the settlement of tax on assets in the return. Only then are your obligations as a VAT payer closed. Do not forget to keep your accounting and tax documents for the period required by law, because a tax audit can come several years after your registration was cancelled and you must be able to show that you proceeded correctly.

Consequences for business partners

Once your registration is cancelled, you stop charging tax on your invoices and your customers can no longer claim a deduction from them. It is advisable to tell your partners about this change in advance, so that they can adjust their accounting and there are no misunderstandings over invoicing or an unjustified deduction on their side that the tax office could later challenge.

What to consider before deciding

Before applying, consider carefully whether cancelling your VAT registration really pays off, especially if you are planning investments with a right to deduct or trade mainly with VAT payers. Discuss the decision with an adviser who will calculate its impact on your business and on the mandatory settlement of tax on assets. Sometimes it is more advantageous to remain a VAT payer despite lower turnover; at other times deregistering pays off almost immediately. The decision always comes down to your specific figures, the structure of your customers and your plans for the future.

Related articles: VAT rates in Slovakia and how to apply them correctly, VAT on imports and exports of goods outside the EU, eKasa and the obligation to record sales: who it applies to.

Frequently asked questions

Can I deregister from VAT as soon as my turnover falls?

Not immediately. Cancellation depends on meeting the conditions over a certain period and on a decision by the tax administrator, who sets the date of cancellation. Check the specific thresholds and deadlines in the current version of the law.

Do I have to pay anything extra on cancellation?

Yes. If on the date of cancellation you own assets or stocks for which you claimed a deduction, you are obliged to settle the tax in your last return. This prevents an unjustified tax advantage when you leave the VAT payer regime.