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VAT Deregistration Process in UAE

VAT deregistration is the process for a registered taxable person to cancel the VAT registration. The main purpose is to deactivate the registration and remove the VAT number of registrants. Tax deregistration can be applied by a person registered under VAT or done by Federal Tax Authority on finding that a person meets the condition for deregistration. The VAT Law provides registered taxable persons with the facility to cancel their VAT registration. Let us understand the circumstances in which a person can de-register under VAT and the process to be followed.

A person registered under VAT can apply for Tax De-registration in the following cases:

  • The person stops making taxable supplies and does not expect to make any taxable supplies over a particular period
  • 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

Types of VAT Deregistration

Voluntary Deregistration

Tax authorities approve deregistration if the tax authorities are satisfied with the conditions of vat cancellation. 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.

you maGuide on Deregistering or Cancelling VAT Registration in UAE

Read More : 3 Simple Steps in De-registering or Amending a Tax Group.

Process for VAT Deregistration

The common process for deregistration under vat is mentioned below:

  1. Apply for deregistration: The registrant should apply for tax deregistration within the particular period if the above-mentioned conditions for de-registrations are duly met.
  2. Submitting of documents: submitting documents to evidence the eligibility to deregister
  3. Payment terms: The registrant should ensure that any vat or administrative penalties due are paid and vat returns are filed. Only upon meeting these conditions will enable VAT deregistration.
  4. Approval: Upon the approval of deregistration, the federal tax authority will cancel the tax registration with effect from the last day of the tax period during which the event of deregistration application occurred or from a date decided by the federal tax authority. Registration 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 being filed.
• Any Administrative Penalties have been paid in full.

VAT Deregistration for companies

The process of deregistration for companies is the same as for individuals. The difference is the criteria to apply for deregistration
The scenarios that require deregistration of tax groups are

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

Penalty for Deregistration

Any taxable persons/companies must apply for deregistration if they fulfill any of the conditions laid down in the Decree Law and Executive Regulations and failure to apply within the timeframe specified will attract an administrative penalty as per Federal tax authorities' guidelines. If there are any occurrences to pay a penalty then you may seek the guidance of a tax expert for further procedures.

If you are looking for assistance in VAT deregistration our VAT experts can guide you in such matters. Farahat and co provide expert services of vat deregistration. Our experts can help you with the tax deregistration process. If you have any inquiries concerning vat deregistration contacts us

Read More : How to Deregister for Excise Tax in UAE.

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.