VAT Deregistration
Deregister of VAT
Businesses and individuals registered under the Federal Tax Authority (FTA) in the UAE can cancel their VAT registration and suspend their Tax Registration Number (TRN) through the process of VAT deregistration. This online process allows taxable persons to cease their VAT obligations and will be effective from the date the FTA approves the deregistration application. Once VAT deregistration is approved, the taxable person will not be required to file VAT returns or pay VAT, but they will be able to claim input tax credit on any remaining VAT on their stock or assets.
What is VAT Deregistration?
VAT deregistration in UAE allows a taxable person or a business to cancel their VAT registration and suspend their Tax Registration Number (TRN). FTA VAT Deregistration is an online process.
Only the businesses and individuals who are registered under Federal Tax Authority (FTA) can de-register from VAT. THE late VAT Deregistration penalty will be AED 10,000.
What is the time frame for VAT Deregistration?
A registrant must apply for VAT deregistration within 20 business days from the occurrence of the above-mentioned events. Registrants can easily apply for VAT deregistration by accessing their FTA portals.
Note: if the date of submission of this de-registration form is more than 20 business days from the date the Taxable Person is required to de-register then you will be subject to a late de-registration penalty of AED 10,000.
How to apply for FTA VAT De-registration UAE?
Step 1 – Sign in to your FTA VAT portal.
Step 2 – On the dashboard, against the VAT registration, click on the ‘De-Register’ button.
Step 3 – Taxable Person Details are pre-populated in the de-registration application.
Step 4 – Reasons for VAT de-registration. Select from the drop-down list that on what basis
you are de-registering for VAT.
1. Business no longer making taxable supplies
2. Business making taxable supplies, but below the Voluntary Threshold
3. Business making taxable supplies, above the Voluntary Threshold, but below the Mandatory Threshold
4. Other – please specify the reason
Step 5 – Effective date from which the Taxable Person is required or eligible to de-register depends based on the de-registration
Step 6 – Upload all the relevant supporting documents by clicking on ‘Choose Files’.
Step 7 – Review and confirm the authorized signatory and declaration section of the application form before submission.
What comes after applying to VAT Deregistration?
After applying for the VAT Deregistration in UAE, FTA will review the application and if they confirm the VAT De-registration the status of VAT De-Registration will be changed to ‘Pre-Approved’. After that the businesses have to submit final VAT Return Filing, after the last VAT Return filing the businesses must clear all the outstanding liabilities in order to complete the VAT Deregistration process.
Who are the Eligibility for VAT Deregistration?
As per the law defined under the regulations of FTA, the following eligibility is must apply for VAT Deregistration in UAE.
When can a company deregister for VAT in UAE?
Companies in the UAE can opt to deregister from VAT if they need to, such as if they no longer meet the registration criteria or if their business has ceased. This process involves submitting a deregistration application to the Federal Tax Authority (FTA) along with supporting documents. If approved, the FTA will issue a deregistration certificate and the company will no longer be obligated to collect and remit VAT. However, it is important to note that deregistration may also have tax implications and should be carefully considered before taking action.
What is the penalty for VAT Deregistration?
If a Registrant in the UAE wishes to deregister from VAT, there are no penalties as long as they submit an application within the specified timeframe. However, if the application is not submitted within the required time, the Registrant will face a penalty fee of 1,000 AED for each delay and for every month thereafter, in accordance with the VAT law. It is important for businesses to meet all VAT requirements and deadlines to avoid incurring unnecessary fees.
Mandatory VAT Deregistration
The time limit for mandatory deregistration is strict and must be adhered to. Businesses and individuals should carefully monitor their taxable supplies and expenses to ensure that they do not exceed the voluntary registration threshold. If they do, they must immediately apply for deregistration for VAT to avoid the penalty.
Under the UAE VAT rules, an individual or business that meets either of the following criteria is required to mandatorily deregister for VAT:
1. Stops dealing in taxable goods and services.
2. The taxable supplies or expenses in the previous 12 months and the next 30 days do not exceed the voluntary registration threshold of AED 187,500.
3. If a business or individual meets these criteria, they must apply for deregistration for VAT within 20 business days of the event that caused them to become eligible for deregistration. Failure to do so will result in a penalty of AED 10,000.
Voluntary VAT Deregistration
Under the UAE VAT rules, an individual or business that is registered for VAT may voluntarily deregister if they meet the following criteria:
1. The taxable supplies or expenses in the previous 12 calendar months were under the mandatory VAT registration threshold of AED 375,000.
2. At least 12 calendar months have passed since the entity was registered with FTA under voluntary registration.
There is no time limit for applying for voluntary deregistration. Businesses and individuals that meet the criteria may apply for deregistration at any time.
