In general, VAT de-registration refers to the termination of a TRN issued as a consequence of VAT registration. To de-register for VAT in the UAE, however, a corporation must cancel its VAT registration with the Federal Tax Authority (FTA). A previously taxable firm may seek to terminate its VAT registration in the UAE for a number of reasons, but the explanation must fit within the parameters specified in current VAT law. The FTA maintains the authority to accept or reject the request for de-registration.
In the UAE, VAT de-registration is just as crucial as VAT registration. To avoid fines, the registrant must understand the current UAE VAT regulations, rules, and procedures in order to submit for VAT de-registration in the UAE within the time limit stipulated in the UAE VAT Law.
VAT Deregistration Eligibility:
The following requirements must be completed in order to file for VAT deregistration in the UAE, according to current UAE VAT legislation as specified by FTA rules.
VAT Deregistration Requirement:
VAT deregistration in the UAE is a mandatory process for enterprises that no longer meet the VAT registration requirements. According to the Federal Tax Authority (FTA), a firm must apply for VAT deregistration if its taxable turnover in the previous 12 months is less than the necessary threshold of AED 375,000 and it does not intend to exceed that barrier again during the following 30 days. Failure to apply for deregistration when needed may result in administrative penalties.
In addition to falling below the threshold, a business may request voluntary deregistration if its taxable supplies fall below AED 187,500 and it has been registered for VAT for at least 12 months. Companies that cease operations altogether or are liquidated must likewise cancel their VAT registrations.
The deregistration process must be completed using the FTA’s online portal, where the company must make a formal application and include supporting documentation such as final tax returns, financial statements, and proof of ended business activity, if applicable. Once authorised, the company receives a deregistration certificate and is no longer required to charge or submit VAT.
It is crucial to note that even after applying for deregistration, the company must continue to meet VAT requirements, such as filing final returns and paying any outstanding tax liabilities, until the FTA formally verifies the cancellation. Delays in commencing deregistration after being eligible may result in fines starting at AED 1,000, which will increase monthly if not resolved.
Businesses should assess their VAT eligibility on a regular basis and deregister as soon as it is no longer required, ensuring full compliance with UAE tax legislation.
The deadline for submitting an application is as follows:
When a registrant satisfies the above criteria, they must apply for VAT deregistration within 20 business days of the triggering event. Failure to apply within the specified time range may result in financial loss as a consequence of late application penalties.
When an FTA-registered entity meets the above-mentioned conditions for VAT deregistration, they only have 20 business days from the occurrence that resulted in such eligibility to apply for deregistration. Failure to apply within the specified time range may result in financial loss as a consequence of late application penalties.
VAT Deregistration on a Voluntary Basis:
According to FTA regulations, any registered entity must register for VAT if it continues to offer taxable services and products but its supply or costs have been less than the statutory VAT registration threshold for the previous 12 calendar months (i.e. AED. 375,000.) AND, over the previous 12 months, the firm has been registered with FTA via voluntary registration. The registered taxable entity may seek VAT Voluntary Deregistration in this case.
The deadline for submitting an application is as follows:
As a result, there is no set date for filing a deregistration application with the FTA.
How Do I Cancel My VAT Registration in the UAE?
Once an FTA registered entity has fulfilled the requirements for deregistering from VAT in the UAE as defined in the VAT Law, they may do so by signing into their VAT Account on the FTA Portal. After logging in, fill out the VAT DEREGISTRATION FORM UAE with your information and the cause for the VAT deregistration. Some of the information from the previous registration data provided during the original application for UAE VAT registration will be pre-populated into the form.
Based on the facts and information given, the FTA UAE maintains the ability to accept or deny the registrant’s application for VAT deregistration, as well as the following clearance: Returns for taxes owed to the entity are being submitted. Administrative Penalties have been fully paid.
If the registrant fails to file for VAT deregistration in the UAE, he or she may submit a late application for FTA authorisation to deregister VAT. Payment of all obligations, as well as the late filing penalty, would be required.
Despite the fact that the VAT deregistration application is complete, the approval status from FTA may be “Pre-Approved” and will only be Approved after all of these requirements are completed.
Penalty for VAT Deregistration
Failure to apply for a required VAT de-registration within the stipulated time limit, i.e. within 20 business days after the occurrence of the events that led to the tax payer entity becoming eligible for VAT deregistration, results in a penalty of AED.10,000.
Following the submission of the VAT Deregistration Application,
Following electronic completion of the online form, together with all required data and justifications, the applicant deregistering for VAT will receive an SMS confirmation on their registered phone validating the submission.
Following the submission of the application, the FTA will evaluate it for the grounds indicated, as well as the status of the returns, outstanding fines, or tax payments (if any).
Following an examination of the application and determination that it fulfills the clearing requirements, the FTA will deregister the registrant entity from VAT, with effect from the end of the most recent tax period in which the taxable entity became eligible for VAT cancellation.
Deregistration of Organizational VAT
In the UAE, the method for deregistering for VAT is the same for organizations as it is for individuals. The distinction is seen in the VAT-registered Groups’ requirements.
In addition to other requirements being met, FTA may allow the organizations’ VAT registration to be withdrawn if any of the following events occur: The registered entity no longer satisfies the criteria for group categorization. The group’s firms are no longer financially connected to the organization.
If FTA believes that a group’s tax condition may result in tax avoidance, it may decide to withdraw the group’s VAT registration.
Following an examination of the application and determination that it fulfils the clearing requirements, the FTA will deregister the registrant entity from VAT, with effect from the end of the most recent tax period in which the taxable entity became eligible for VAT cancellation.
How can we assist you?
Under Tax Services, KGRN Consultants provides the following services: Services for VAT Implementation VAT Returns Must Be Filed VAT VAT training courses for company owners, organizations, and consultants are provided via the Consultancy Services for Compliance Review Service of Tax Agents, as are VAT deregistration services in all seven UAE states (Emirates Dubai, Abu Dhabi, Sharjah, Ajman, Fujairah, Ras Al Khaima, Um-Al-Quwain)
In addition to other requirements being met, FTA may allow the organisations’ VAT registration to be withdrawn if any of the following events occur: The registered entity no longer satisfies the criteria for group categorization. The group’s firms are no longer financially connected to the organisation.
For further information on VAT Deregistration services, please contact us and get more details about de-registration process
