It is common for businesses to de-register for VAT with the UAE Federal Tax Authority, also known as cancelation or termination of VAT registration. Only the FTA can approve a VAT deregistration in the UAE if the reasons for termination are valid and the necessary conditions are met. Upon registering with the FTA for the first time, businesses that do not exceed AED 187,00 in their first 12 months of operation or cease making taxable supplies can deregister from the VAT case.
Through the FTA portal, the VAT Deregistration procedure in UAE can be conducted online. Businesses that cease to operate, however, must obtain a letter of liquidation from the government to be deregistered from VAT.
Businesses in the UAE can deregister from paying VAT either voluntarily or mandatorily through VAT de-registration.
As soon as the FTA receives the application for VAT deregistration in the UAE, it will verify the application, and if the requirement has been met, it will cancel the VAT number for the entity. The FTA may reject the deregistration application if the reasons or conditions are invalid.
If your taxable turnover is less than AED 187,500 or you have stopped conducting business, you must mandatorily deregister for VAT. In another case if the business makes taxable supplies over the past 12 months period that exceed the voluntary VAT registration threshold limit of AED 187,500 but is below the mandatory VAT registration threshold limit of AED 375,000, you may choose to deregister your business on a voluntary basis.
According to FTA regulations, you can determine your eligibility for VAT Deregistration in UAE by following the steps below:
The FTA must be notified by submitting a VAT deregistration application when:
It is possible for businesses that have made taxable supplies over the past 12 months to apply for VAT deregistration voluntarily if they are above the voluntary VAT registration threshold limit of AED 187,500 but below the mandatory registration threshold limit of AED 375,000.
Article 21 of the VAT Law requires you to deregister with the FTA within 20 business days of the date the event occurs, which requires you to do so.
Once a successful submission has been made, your application status will change to "Pre-Approved." However, once all outstanding liabilities have been cleared and final return has been submitted, the status will change to "Approved." The VAT Deregistration process will then be complete.
In accordance with Article 21 of the VAT Law, you must apply for deregistration from VAT within 20 business days of the date of the event that requires you to deregister with the FTA.
Regarding FTA VAT de-registration in the UAE, following the correct procedure and submitting all the required documentation to the Federal Tax Authority (FTA) is essential. However, the process can be complex and varies depending on the circumstances of your business, so it's advisable to seek the assistance of a professional auditing firm like AMCA Auditing. They can provide the necessary guidance and support to ensure you complete the process accurately and efficiently.
VAT Deregistration can only be requested by Registrants within 12 months of the deregistration date stipulated in Article 17
A company can go forward with a voluntary deregistration procedure: -
The following procedures can be followed for mandatory deregistration: -
In order to cancel a VAT registration for a group, the FTA must approve the following: -
The VAT number issued on registration will be cancelled once the deregistration number is approved. The registration form can be filled out again by any company wishing to reregister, and a new VAT number will be issued.
There will be no de-registration of registrants if,
In the event that the deregistration application is not submitted within the required time frame, an administrative penalty of Dh 10,000 will be imposed pursuant to Cabinet Resolution 40 of 2017 on Administrative Penalties for Violations of UAE Tax Laws.
It is not advisable to move forward with the VAT cancellation process if you intend to continue your business or if you are trying to find an investor. As such, if the company expects to make a reasonable return within the next twelve months, keep the TRN and file the tax return as ZERO.
Accordance with the Emirati VAT laws, AMCA offers expert services of VAT Deregistration in UAE. AMCA analyzes all possible reasons for deregistration and simplifies the process. To streamline the deregistration process, AMCA evaluates your business activities and looks into deregistration options.
We would be happy to discuss with you any questions or concerns regarding UAE VAT De-registration or your business in general. AMCA looks forward to hearing from you!
Yes, foreign businesses are eligible for VAT refunds under certain circumstances.
Yes, Penalties will be imposed for non-compliance.
Yes. However, they can claim VAT refunds at the airport at the end of their trip (subject to certain conditions).