What is VAT De-Registration?
VAT or 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.
A VAT-registered person in the UAE can apply to de-register if they meet any of the following conditions:
- Business no longer making taxable supplies in the last 12 months period
- Business making taxable supplies but below voluntary threshold i.e. below AED 187,500 in the last 12 months period
- Business making taxable supplies above voluntary threshold but below Mandatory threshold i.e. less than AED 375,000
Note: A person who registers for VAT voluntarily must stay registered for at least 12 months before applying to de-register.
Time period for submission of de-registration application:
The application for VAT deregistration must be made in electronic form as prescribed by the Authority and within “20 business days” from when the conditions for de-registration were met.
Note: If the date of submission of this de-registration form is more than “20 business days” from the date the Taxable Person is required to de-register then you will be subject to a late de-registration penalty of AED 10,000.
When does the de-registration come into effect?
- Mandatory de-registration: From the last day of the period in which the conditions for de-registration are met.
- Voluntary de-registration: From the date requested by the registered person or the date the request is made when no preferred date is mentioned.
In addition, a registered person cannot be de-registered if has not paid any outstanding VAT penalties and VAT liability in full and submitted all relevant VAT returns
The Authority may refuse the application for de-registration where it is in disagreement with the applicant. The Authority will issue a formal notice to the applicant with a date from which de-registration takes effect, within “10 business days” of making a decision.
Watch the video on De-Registration below: