What is De-registration?

Tax De-registration is the provision for a registered taxable person to cancel his/her VAT registration. It means de-activation of the registration and the VAT number of the taxable person. Tax de-registration can be applied for by a person registered under VAT or done by the FTA on finding that a person meets the conditions for de-registration.

What the reasons are for de-registration?

There are 3 major points for de-registration:

-Business no longer making taxable supplies

-Business making taxable supplies but below voluntary threshold

-Business making taxable supplies above voluntary threshold but below Mandatory threshold

-Other

What is the process of De-registration?

When a taxable person after logging into the FTA website, there is an option to open ‘De-registration’ form in dashboard. One should fill up the De-registration form and submit the necessary documents before submitting the De-registration form.

When to do De-registration?

A registrant should apply for de-registration within 20 business days of the occurrence of either of dropping below the threshold of AED 375,000 in annual revenue, if it closes down or no longer trades in taxable goods or supplies.

The FTA can cancel a person’s registration if it is found that the registrant satisfies either of the conditions listed above for de-registration. This is called mandatory tax de-registration. Hence, VAT de-registration is a welcome option for persons who have registered under VAT but do not continue to make supplies requiring registration. Such persons do not need to continue being registrants and can apply for tax de-registration on satisfying the applicable conditions.

If taxable supplies are less then AED 187,500/- during last 12 months, but Taxable expenses are more than AED 187,500/- or vice versa then what to do?

It is not mandatory to apply for de-registration.

If taxable supplies and taxable expenses individually are less than AED 187,500 during last 12 months, then what to do?

It is mandatory to apply for de-registration.

If refund is yet not claimed, can we apply for de-registration?

No, first the client has to claim refund then only they can file de-registration. Otherwise taxable person cannot apply for refund.

If fourth return is not filed yet (4th return is due for filing in February 2019 or later), can we apply for de-registration?

For de-registration if taxable person completes 12 months then, one can apply for De-registration subject to compliance of other provisions of the law.

If we don’t do de-register within the due date, then how much is the penalty?

AED 10,000/-

Within how many days we have to do de-registration?

Within 20 business days from the date when taxable person meets with one of the two conditions mentioned above.

In case of Tax group, how to consider? (Each company T/O or all company together).

Awaiting clarification from FTA.

In case of Tax group, if a Member company or Representative company closes, can we do de-register?

That particular company shall apply for de-registration.