Vat De-Registration
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VAT Deregistration in the UAE A Guide by JSC
VAT deregistration, also known as cancellation or termination of VAT registration, is a process where businesses deregister with the UAE Federal Tax Authority (FTA). This can only be approved by the FTA if the termination reasons are valid and necessary conditions are met. Businesses that do not exceed AED 187,500 in taxable turnover during their first 12 months of operation or cease making taxable supplies may apply for deregistration.
VAT Deregistration in the UAE
The process of VAT deregistration in the UAE is conducted online through the FTA portal. However, businesses that cease operations must obtain a letter of liquidation from the government to complete the process. VAT deregistration can be classified as either mandatory or voluntary.
Once the FTA receives a deregistration application, it verifies the request. If all conditions are satisfied, the VAT number for the entity is canceled. Applications may be rejected if the reasons or conditions are deemed invalid.
Who Must De-register for VAT?
- Mandatory Deregistration:
- Taxable turnover falls below AED 187,500.
- Business operations cease completely.
- Voluntary Deregistration:
- Taxable supplies exceed AED 187,500 but remain below AED 375,000 during the past 12 months.
- Businesses meeting voluntary deregistration criteria can apply if desired.
Eligibility for VAT Deregistration
- Eligibility for VAT deregistration, as per FTA regulations, includes:
- Businesses that no longer make taxable supplies.
- Businesses with taxable supplies below the voluntary VAT registration threshold (AED 187,500) over the past 12 months.
- Entities impacted by other operational reasons rendering them ineligible for VAT registration.
- Businesses above the voluntary threshold but below the mandatory threshold may voluntarily deregister under specific conditions.
Process for VAT Deregistration
- Mandatory Timeline: Article 21 of the VAT Law mandates businesses to apply for deregistration within 20 business days of the event that requires deregistration.
- FTA Review and Approval: Upon submission, the FTA reviews the application. If approved, the VAT number is canceled.
- Final Liabilities and Returns: Applicants must clear outstanding liabilities and submit a final VAT return before deregistration approval.
Steps for VAT Deregistration
- 1. Log in to the FTA e-services portal.
- 2. Navigate to the VAT deregistration section.
- 3. Submit the VAT deregistration application with all required documentation.
- 4. Clear all outstanding VAT liabilities and penalties.
- 5. Await notification from the FTA regarding the application status.
VAT Deregistration for Groups
- Group deregistration is subject to FTA approval when:
- The registered business no longer qualifies as a group.
- A member of the group no longer maintains financial relationships.
- Tax evasion concerns arise within the group.
- The FTA cancels the VAT number upon approval. If necessary, businesses can re- register and obtain a new VAT number.
Situations Where Applications Are Disapproved
- VAT deregistration applications may be rejected if:
- The application is submitted after the 20-business-day deadline.
- Outstanding taxes and penalties are not cleared.
- Tax returns for the registration period are incomplete.
- Failure to comply with the required timeline incurs an administrative penalty of AED 10,000, as per Cabinet Resolution 40 of 2017 on Administrative Penalties.
Voluntary and Mandatory Deregistration Scenarios
Voluntary Deregistration:
- Registrants can apply within 12 months of the deregistration date under Article 17.
- Taxable supplies are no longer made.
- Turnover remains below AED 187,500 annually.
- No expectation of exceeding the voluntary registration threshold in the next 30 days.
- The company is permanently closed.
Mandatory Deregistration:
- The company ceases to operate or earn taxable supplies exceeding AED 375,000.
Professional Assistance for VAT Deregistration
Navigating VAT deregistration can be complex, requiring adherence to stringent FTA guidelines. At JS Corporate Solution (JSC), we offer expert guidance to simplify the process. Our team evaluates your business activities, provides tailored deregistration solutions, and ensures compliance with UAE VAT laws.
Why Choose JSC?
- Comprehensive analysis of deregistration reasons.
- Professional assistance with documentation and FTA submissions.
- Streamlined process management to avoid penalties and ensure compliance.
- For expert support with VAT deregistration in the UAE, contact JSC today. Simplify your tax journey with our tailored solutions and professional expertise.
Contact JS Corporate Solutions today for expert VAT De-registration services in Dubai.
Let us help you stay VAT compliant and focused on your business success!