Tax De-Registration in UAE

Taxable businessmen must know the rules and processes for VAT annulment in UAE, as administrative penalties will be imposed on failure to file an application within the timeframe specified in the tax law. Let us understand the circumstances in which an entity can de-register under VAT and the process to be followed for the same.

"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 Federal Tax Authority (FTA) on finding that a person meets the conditions for de-registration.

Eligibility for VAT Deregistration

As per the regulations of FTA , an entity can apply either for Compulsory (mandatory) deregistration or for Non-compulsory (voluntary) deregistration. Whether it is a compulsory or non-compulsory category, the applicant should comply with certain eligibility norms to get the cancellation process approved by the FTA.

• Compulsory VAT-Deregistration
• Non-compulsory VAT Deregistration

Compulsory VAT-Deregistration

A) An individual or a business is eligible under Compulsory deregistration:-

• If it stops dealing in taxable goods and services any more;
• If the taxable supplies or expenses in the past 12 months and the next 30 days do not exceed the voluntary registration threshold of AED.187, 500.

 B) The time limit:

• The time limit for Compulsory VAT Deregistration process is 20 business days from the event causing such eligibility.
• The failure of the Registrant to submit  a deregistration application within the timeframe specified in the Tax Law (20,000)

Non-compulsory VAT Deregistration

A) An individual or a business is eligible under Non-compulsory deregistration:-

• If the supplies or expenses for the past 12 months are below the Compulsory VAT registration threshold of AED.375, 000
• If the entity has passed 12 calendar months since the registration with the FTA under Non-compulsory registration.

B) The Time limit:-

• There is no time limit for an entity to deregister under non-compulsory segment.

*Note: Deregistration does not exempt the Person from his obligations and liabilities that were applicable under the Decree-Law while he was still a Registrant.

Azmi A. Elgabour / Global Tax Practitioner, Tax Agent / +971 / 501235918

Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax.