VAT deregistration in UAE

VAT Deregistration in UAE

VAT registrations are vital for any corporate organization, but so is VAT deregistration. A business might need to revoke its VAT registration under certain specific circumstances.

The Federal Tax Authority (FTA) refers to such termination of VAT Registration as VAT Deregistration. Businesses must make sure that their request to deregister for VAT in the UAE is justified.

FTA has the right to deny the application if the justification is false. In some circumstances, the FTA may also impose severe fines.

When can one opt for VAT Deregistration in the UAE?

VAT Deregistration in the UAE is an online process. Businesses and people who have registered with the Federal Tax Authority (FTA) may opt to deregister VAT in one of two circumstances:

• They must apply for VAT Deregistration if their annual revenue was less than AED 187,500 in the 12 months following their registration with the FTA.
• The company must apply for VAT deregistration if it ceases to make taxable supplies.

Within 20 business days of the occurrence of the aforementioned events, a registrant must apply for VAT deregistration. By using their FTA portals, registrants can quickly apply for VAT deregistration.

It should be noted that a person who voluntarily registered under VAT is not eligible to deregister within a year of the registration date.

And, to apply for VAT Deregistration, companies that are closing down must receive a corporate liquidation letter from the appropriate government agencies.

What are the different types of Deregistration of VAT?

In the UAE, the deregistration of VAT is either of two types, i.e., mandatory or voluntary. These two stand on their own with different eligibility criteria.

1. Mandatory VAT Deregistration

Deregistration of VAT in the UAE becomes mandatory for a company

• when it ceases to engage in taxable supplies or
• when its taxable supplies and expenses for the past year and the upcoming 30 days do not reach the threshold for voluntary VAT registration, that is AED 187,500.

Timeline to file deregistration

Businesses should submit their deregistration application as soon as feasible when VAT deregistration becomes required to reduce their risk of being fined or punished.

Mandatory VAT deregistration must be completed within 20 days, from the day the business ceases its eligibility to be taxed. Your company will suffer if an application is not submitted in 20 days.

Penalty for filing late deregistration

AED 10,000 is assessed as a penalty for late applications for deregistration of VAT.

2. Voluntary VAT Deregistration

A company may apply for voluntary deregistration of VAT in the UAE if it offers taxable products and services but the value of its taxable deliveries has remained below the specified threshold (AED 375,000) over the previous 12 months.

Additionally, a company that voluntarily registers from the VAT system may request deregistration after 12 months.

There is no established time frame for voluntary VAT deregistration. Companies that match both of the aforementioned criteria may seek voluntary deregistration at any time.

What is the process of VAT Deregistration?

Step 1 – go to the FTA’s online portal and log into your account.

 2 – after logging in, locate the “de-register” button on your dashboard and click on it.

3 – taxable person details are pre-populated in the de-registration application.

4 – reasons for VAT de-registration. Select from the drop-down list on what basis you are de-registering for VAT.

5 – The effective date from which the taxable person is required or eligible to de-register depends on the de-registration

6 – upload all the relevant supporting documents by clicking on ‘choose files’.

7 – review and confirm the authorized signatory and declaration section of the application form before submission.

8- once everything is in order, click on the “submit” button to complete your application process.

What are the documents required for VAT Deregistration?

• In the instance of deregistration due to the discontinuation of making taxable supplies:

1. Evidence of the end of taxable supply production.
2. Turnover Declaration for the tax periods beginning with the effective date of registration to the present, signed and stamped by the authorized signatory and printed on the taxable person's letterhead.

• In the circumstance of deregistration based on taxable supply that does not surpass the voluntary registration threshold or that does so but does not exceed the required registration barrier:

1. Turnover Declaration on the printed letterhead of the taxable person for the tax periods from the commencement of registration to the present signed and stamped by the authorized signatory.
2. A statement that within the next 30 days, the taxable person will not reach the mandatory registration threshold.

• Other

Confirmation that the parent business or the Tax Registration Number (TRN) utilized will submit the returns, together with a mention of the TRN on which the returns are submitted.

How we can help?

BRS provides professional VAT Deregistration services in the UAE in compliance with VAT laws. We thoroughly investigate the problems and review your company's operations before optimizing the deregistration procedure for you to simplify the process.

We provide a wide range of VAT services in Dubai since we understand the importance and value of VAT services for every business entity in the United Arab Emirates, including VAT registration, VAT training, and VAT return filing in the UAE.