VAT De-Registration
Navigating the Process of VAT De-Registration in the UAE
Introduction
VAT de-registration in the UAE is the process of cancelling the VAT registration of a business. This is required when a business no longer meets the criteria for VAT registration and must formally remove itself from the Federal Tax Authority’s (FTA) database. Once de-registered, the business is no longer required to collect or pay VAT on goods and services. Additionally, all branches or subsidiaries associated with the business must also be de-registered.
A taxable person must notify the FTA of their eligibility for VAT de-registration within 20 business days of meeting the required conditions.
When Is VAT De-Registration Required?
A business must de-register for VAT if:
- It ceases making taxable supplies or
- Its taxable supplies in the previous two months fall below the voluntary registration threshold
When Is VAT De-Registration Required?
- Mandatory De-Registration
The FTA will deregister a taxable person if they confirm that:
- The business no longer makes taxable supplies and does not intend to in the next 12 months.
- The value of the business’s taxable supplies or expenses in the previous 12 months is below the voluntary registration threshold, and the business does not anticipate exceeding the threshold in the next 30 days.
- Voluntary De-Registration
The FTA will deregister a taxable person if they confirm that:
- If a business’s total taxable supplies in the past 12 months were less than the mandatory registration threshold, it may voluntarily apply for de-registration.
- However, businesses that voluntarily registered for VAT cannot apply for voluntary de-registration until 12 months have passed since registration.
Time Limit to Submit VAT De-Registration
- A business must submit the de-registration application within 20 working days from the date they become eligible for de-registration.
- Penalties for Late VAT De-Registration:
- AED 1,000 penalty for the first month of delay.
- AED 1,000 penalty per month thereafter, up to a maximum of AED 10,000
How Spectrum Can Help with VAT De-Registration
VAT de-registration is a structured process that requires proper documentation. It is recommended that businesses seek assistance from a tax expert or consultant to avoid errors and penalties.
- Assist businesses in determining eligibility for de-registration.
- Help prepare and submit the VAT de-registration application to the FTA.
- Ensure all necessary supporting documents are correctly filed.
- Guide businesses through the FTA review process and provide assistance in case of further queries.
Connect with us
Need assistance with VAT deregistration for your business? Whether you’re closing operations or no longer required to be VAT-registered, Spectrum provides expert support to ensure a smooth and compliant process.