As a business owner, there are various legal and financial obligations that you need to adhere to. One such obligation is VAT registration, mandatory for businesses meeting certain criteria in the UAE. However, conditions may arise where you need to cancel your VAT registration, which involves a process known as VAT de-registration. While it may seem simple, some specific conditions and requirements must be met before the Federal Tax Authority approves the cancellation.
In this blog, we will discuss the complete process of VAT de-registration UAE and how Spectrum Audit can help you navigate it smoothly.
What is VAT De-Registration?
UAE VAT deregistration lets taxable individuals and businesses cancel their VAT registration and suspend their TRN. Only Federal Tax Authority (FTA)-registrants can deregister from VAT. There is a penalty of AED 10,000 for late VAT deregistration.
How to apply for FTA VAT De-registration in UAE?
Businesses can finish deregistering from VAT by logging in to their Emaratax portals by following the below steps:
- Step 1: Go to your FTA Emaratax portal and sign in.
- Step 2: Click on the User Profile on the Home screen
- Step 3: Click “Actions” on the Value Added Tax tab and then click “Deregister.”
- Step 4: Start filling in the deregistration information.
- Step 5: Choose the reason for deregistering from VAT from the drop-down list.
- Step 6: The date from which the Taxable Person must deregister or can do so depends on the type of deregistration.
- Step 7: Click “Choose Files” and then “Upload” all the necessary documents and Turnover details.
- Step 8: Select the authorized signatory
- Step 9: Review your application and submit
Even though the steps are simple and easy to follow, you might need help from an expert and trusted professional like Spectrum Audit to ensure the de-registration process goes smoothly.
Timeline for Cancellation of VAT Registration
Within 20 business days of any events when the registrant is liable to apply for deregistration, a registrant must submit a request to be deregistered from VAT. By accessing their FTA Emaratax profile, registrants can quickly submit an application to be deregistered from VAT.
The time frame for VAT de-registration UAE relies on the type of business and the number of documents that need to be submitted. In most cases, removing your name from a list can take up to three months. This includes the time needed to prepare the papers, send the application to the FTA, and get approval. FTA may ask for resubmission by submitting the required documents.
Types of VAT De-Registration
- Mandatory De-Registration
When a registrant stops making taxable supplies or the taxable turnover in the past 12 months period falls below the voluntary threshold limit of VAT registration of AED 187,500 and not expecting to make taxable supplies or expenses in the next 30 days, the registrant must go through the process of deregistering from the VAT.
- Voluntary De-Registration
Where a taxable person is not required to deregister, they may apply for voluntary deregistration if the total value of their taxable supplies in the previous 12 months was less than the Mandatory Registration Threshold limit of AED 375,000. However, if the person has voluntarily registered for VAT, voluntary deregistration will not be possible until 12 months have elapsed since the registration date.
VAT deregistration will not be complete if the tax registrant hasn’t paid their VAT fines and taxes and filed all their VAT returns.
How Does Spectrum Auditing Help You With the VAT De-Registration Process?
As an FTA-approved Tax Agent, Spectrum Auditing has a team of experienced and informed tax consultants who can help you with the process of VAT de-registration UAE.
The Spectrum Audit team will ensure all the paperwork is ready and sent to the FTA correctly. We also help guide the process to ensure the de-registration follows the FTA’s rules and procedures.
Spectrum Audit and Accounting is a licensed tax agent with a Dubai office. It also offers full accounting and auditing services for VAT de-registration in the UAE. We offer VAT registration and Audit services in Dubai, Abu Dhabi, Sharjah, Ras Al Khaimah, Fujairah, Ajman, Umm Al Quwain, and the rest of the UAE. So you can easily register or de-register your company with trusted and expert professionals’ help.
Call us at +971 4 2699 329 if you need help with the process of VAT de-registration UAE. The team will be happy to assist you.