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4 Facts for VAT Deregistration in UAE

Any person or tax group have to comply with the rules laid down by the Federal Tax Authority.  Rules for tax deregistration include cancellation of VAT registration if the registrant at meet any of the conditions required for cancellation. Tax deregistration is required when any taxable business no more exists or does not intend to make any profit in the future.

VAT rules require that a Tax Registrant must apply to the Authority for de-registration in accordance with certain scenarios mentioned in the VAT Decree-Law. Below mentioned are four facts concerning the deregistration of VAT for both individuals and companies.

Fact 1:  Scope of Application

conditions for individuals

Any person who satisfies the below-mentioned criteria can apply for deregistration:

  • Any person who does not deal with taxable goods for a long time or does not make any taxable supplies may request for deregistration
  • The person’s taxable supplies or taxable expenses incurred over a period is less than the threshold limit as mentioned in Federal tax authority guidelines

 conditions imposed on tax group

A tax group is a group of two or more related persons registered as a single taxable person for the purpose of tax. Below mentioned scenarios are applied to tax group initiating deregistration

  • The business registered as a tax group no longer meets the requirement of registration as a tax group.
  • The persons under the tax group are no more financially or economically associated with the group.
  • The federal tax authority can cancel the registration if the tax group is involved in tax evasion or non-compliance.

Fact 2: Specify the Method of Deregistration

The registrant has to specify the method used for deregistration below mentioned are a few methods

Voluntary deregistration: voluntary deregistration is a self-imposed decision by the registrant. Any person or tax group feel that they meet the above-mentioned criteria for deregistration may apply for cancellation of VAT registration. The valid reason shown should be verified by the authorities for the voluntary deregistration of VAT.
Mandatory deregistration: when the tax authorities themselves cancel the tax registration if they are satisfied with the conditions of cancellation of VAT. If the tax authorities verify that the firm is neither making any profits or does not intend to make any profit in the future, it mandatorily deregisters the person.

Fact 3: Application for deregistration

  • Registration: Any person or tax group should apply for registration if they fulfill all the conditions for deregistration.
  • Submission Should submit the important document that evidences the eligibility of cancellation
  • Settling dues: Any person or tax person should ensure that any vat or administrative penalties due are paid and VAT returns are filed
  • Approval: The federal tax authority will cancel the tax registration after fulfilling the required conditions. Registrant receives a successful notification of de-registration after the approval of the deregistration application.
    The decision of approval by the federal tax authority depends on the provided reason as well as the clearance of all:
    Returns are being filed.
    • Any Administrative Penalties have been paid in full.

Fact 4: Penalties for non-compliance

Any person or tax group who fails to apply for deregistration if they fulfill any of the conditions laid down in the Decree Law and failure to apply within the timeframe specified will attract a vat deregistration penalty as per Federal tax authorities' guidelines. A vat expert can make you aware of the rules regarding deregistration. Lack of understanding may attract huge penalties.

If you are looking for guidance in rules regarding VAT deregistration VAT experts can guide you in such matters. Farahat and Co provide expert services of vat deregistration. Our experts can make you aware of the rules and regulations of deregistration. If you have any inquiries concerning vat de-registration contacts us


Ervee is a CPA with international experience in Tax and Accounting. He has over 12 years of experience in accounting and bookkeeping and over a year in VAT implementation, registration, and accounting in UAE. He regularly drives out inefficiencies in company operations and loves the challenge of helping clients find additional ways for an easier and improved compliance and verification of transactions.