Tax Registration is primarily governed by Federal Law No. 8 of 2017 on Value-Added Tax (the VAT Law), the Cabinet Decision No. 52 of 2017 on the Executive Regulations of Federal law No. 8 of 2017 on VAT (the Executive Regulations) and the Federal Law No. 7 of 2017 on Tax Procedures (the Tax Procedure Law).
In terms of Article 1 of the VAT Law, Tax Registration is defined as a procedure whereby a Taxable Person or his Legal Representative registers with the Federal Tax Authority for tax purposes.
Tax Registration is confirmed when the Authority grants the Taxable Person a Tax Registration Number (TRN). The TRN is defined in the VAT Law as a unique number issued by the Authority for each person registered for tax purposes.
Procedures for Tax Registration, Deregistration and Amendment of Data Related Thereto
Article 6 (1) of the Tax Procedure Law stipulates that a non-registered Taxable Person or any other person who has the right to register shall apply for registration under the relevant provisions of the Tax Law.
Article 6(2) of the Tax Procedure Law stipulates further that a Registrant shall:
- Include his TRN in all correspondence with the Authority or with other relevant persons in accordance with the provisions of the Tax Law.
- Inform the Authority of the occurrence of any circumstance that might require the amendment of information related to his Tax record kept by the Authority, within 20 business days from the date of such occurrence.
- Apply for de-registration in accordance with the relevant provisions of the Tax Law.
Types of Tax Deregistration
As prescribed in Articles 13 and 17 of the VAT Law, Tax registration may either be mandatory or voluntary. Similarly, tax deregistration may also be mandatory or voluntary.
The following article will discuss the process of VAT deregistration in detail.
Mandatory Tax Deregistration
Article 21 of the VAT Law prescribes that the Taxable Person shall mandatorily apply to the Authority for deregistration in the following cases:
- The person ceases to make Taxable Supplies and does not intend to make Taxable Supplies in the upcoming twelve (12) months.
- The annual supplies or expenses in the preceding twelve (12) months or forthcoming thirty (30) are not in excess of the voluntary registration threshold of AED 187,500.
In accordance with Article 14 of the Executive Regulations, the application for deregistration must be made within 20 business days from when the conditions of deregistration were met.
Article 14(3) of the Executive Regulations provides that mandatory deregistration will take effect from the last day of the period in which the conditions for deregistration are met.
Voluntary Tax Deregistration
Articles 22 of the VAT Law provides that a Taxable Person may deregister voluntarily if at the end of any month such person’s value of Taxable Supplies in the previous twelve (12) months does not exceed the mandatory registration threshold of AED 375,000.
However, Article 23 of the VAT Law states that a person who has registered voluntarily must be so registered for a minimum of twelve (12) months before he may become eligible to apply for deregistration.
Article 14(7) of the Executive Regulations provides that voluntary deregistration will take effect from the date requested by the registrant or, if no preferred date is specified, the date when the request is submitted.
Conditions for Tax Deregistration
Article 14(5) of the Executive Regulations provides that deregistration (mandatory or voluntary) will not be permitted unless all VAT returns have been submitted and all outstanding VAT payments and/or penalties have been settled in full.