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VAT Deregistration

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VAT deregistration in the UAE

Business owners in the United Arab Emirates choose to cancel their VAT registration for many reasons. The Federal Tax Authority (FTA) allows a taxpayer to deactivate or cancel their Tax Registration Number (TRN). Cancellation of VAT registration in the UAE is as important as VAT registration for businesses. The Value Added Tax laws set out a very clear threshold and procedure for requesting the cancellation of VAT in the UAE. Here we will briefly look at all aspects related to the deactivation of VAT on supplies.

What is the deactivation of FTA VAT?

VAT deregistration in the UAE is the online process of suspending a company’s Tax Registration Number (TRN). A taxable person registered under the FTA can apply for de-registration of VAT. Taxpayers can make this decision themselves or hire a VAT consultant in Dubai, Abu Dhabi, and any other emirate to avoid penalties.

How do I apply for VAT deregistration in the UAE?

A company or individual can apply for VAT deregistration in the UAE if it meets any of the criteria for compulsory or voluntary VAT deregistration. As mentioned below:

Voluntary VAT deregistration

If the company no longer makes taxable supplies and does not intend to do so in the next 12 months. In this case, they are eligible to apply for VAT deregistration in the UAE.

Scenario 2: If the company’s turnover has decreased by AED 375,000 and does not exceed AED 187,500 within 12 months of registering with the FTA, it can apply for voluntary deregistration from VAT.

Compulsory VAT deregistration

A person or company applies for compulsory deregistration from the UAE if the turnover of taxable supplies falls below the voluntary threshold of AED 187,5000.

The time limit for VAT deregistration

The time limit for cancellation of VAT registration in the UAE is 20 working days from the above situations. An application for cancellation of VAT registration must be submitted within the prescribed time limit via the FTA’s online portal.

Penalty for late VAT deregistration

Businesses must submit their VAT deregistration application within the specified tax period. If a company fails to submit a VAT deregistration application, it is subject to a late deregistration penalty of AED 1 000 for each month of delay. The best way to comply with all value-added tax laws is to outsource VAT in Dubai.

VAT deregistration process in the Emirates

Due to the lack of knowledge of the UAE authorities, many taxpayers have questions about how to apply for the cancellation of their VAT registration with the FTA. However, we will guide you through every step of the VAT cancellation application process, following all the rules. Also, the authorities need to make sure that a winding-up letter is available before a company is going to apply for VAT revocation in the UAE.

Step 1: Apply on the FTA portal

The main step is to apply on the Federal Tax Authority’s (FTA) online portal. To log in, you will need to provide your registered email address and password. The VAT cancellation option is available in the VAT registration tab. Simply click the “De-Register” button and start the process of de-registering for VAT in the UAE.

Read more VAT registration

Step 2: Add details to the form

The next step is to add all the necessary information and documents to the de-registration application. The form is pre-populated with basic taxable personal information. Add the desired date of cancellation of the VAT registration in the section from which the subject is entitled to cancel the registration. Click on the Choose Files button to upload all the relevant supporting documents. From the drop-down menu, select the basis on which you wish to cancel the VAT registration.

The business no longer makes taxable supplies

Businesses make taxable supplies but do not exceed the voluntary threshold.

Businesses making taxable supplies above the voluntary threshold but below the mandatory threshold.

Other – please specify the reason

Step 3: Review and submission

The final step is to review the declaration and the authorized signatory before submitting the application. We also advise businesses to review all information once as incorrect information may result in VAT penalties. Simply press the ‘submit’ button and the FTA will then confirm your VAT deregistration in the UAE.

Exclusion of VAT groups from the register

The right of a VAT group to deregistration in the UAE is the same as that of an individual taxable person or company. Although there are certain conditions that a VAT group must fulfill, such as:

The authorities may approve the removal of a VAT group from the register if the group is no longer considered a VAT group.

The taxable person may cancel the VAT registration if the group has no financial links with the group.

The FTA may cancel the registration of a group if it anticipates that the taxpayer status will lead to tax evasion.

BestaxCA provides VAT deregistration in Dubai

VAT-registered companies need to know how to deregister for VAT, complying with all UAE tax rules. Many times, taxpayers miss the application deadline or submit inaccurate information, which leads to unnecessary VAT penalties in the UAE. In such a situation, our Bestax chartered accountants and VAT consultants in Dubai offer professional VAT registration as well as VAT exclusion services in accordance with the standards.  Our tax experts not only advise taxable businesses but also check all your VAT documents. BestaxCA helps businesses to carry out error-free VAT de-registration in UAE without any penalties. Contact us!

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