Many companies and individuals register for VAT. They charge their customers some amount while they provide them some services and products. All the importers must pay the VAT without paying VAT; no individual or company can sell imported goods or products. There are certain rules and regulations under which a company or individual has to pay VAT. If the annual revenue increases 30,000 Dirhams, it becomes compulsory for that individual or company to pay the VAT. Some organizations or people pay VAT voluntarily, even if their annual income is not up to the mentioned amount.

Registration for VAT is compulsory, and for accomplishing this goal, there are certain procedures that a company must follow. The applicant must provide certain documents and papers to register. Likewise, there are also certain conditions and documents required to deregister for VAT. After registering for VAT, some individuals feel that they are not meeting VAT’s regulations, due to which they opt to deregister.

In the upcoming paragraphs, we will discuss some of the conditions under which one can apply for deregistering and the steps you must follow.

When to deregister VAT?

Deregistering for VAT is not an individual choice; you have to prove your condition for deregistering VAT. After analyzing your request and condition, the authorities will further proceed with your application and give you approval for deregistering VAT. Below are some of the conditions under which certain people or organizations apply for deregistration.

1. When your revenue is below 30,000 dirham

A user or a company may mandatorily register for VAT if their annual income meets VAT’s standards and policies. Then those individuals are bound to register for it.  If the annual income of that individual or the company is less than 30,000 Dirham, they must deregister VAT. If the value of supplies is less than the amount mentioned above for the whole year and will remain below for the next 30 days, then apply for deregistering.

For avoiding penalties, it is obligatory to apply for deregistration before the end of the year; else, an individual or the company has to bear penalties defined by the authorities. To avoid penalties, you can also hire the best VAT consultancy in Dubai and smoothly deal with registration and deregistration procedures.

2. When a member in a tax group does not meet the VAT criteria

Usually, a group of individuals or a group of companies register for a single VAT. If the annual income of an individual or a company in a VAT is less than 300,000, they opt to deregister VAT for that individual. It shouldn’t be that way; you do not have to deregister for that individual or a company. If the annual taxable supplies of a person within the group meet VAT’s requirement, then there is no need to deregister VAT for individuals in the group who do not meet the requirement.

3. When you stop selling taxable supplies

VAT is applicable on taxable supplies when a person or the company provides or imports supplies taxable supplies quit selling or importing the supplies; then they can deregister from VAT. It is compulsory to inform the authorities if you are quitting the supply of taxable products.

4. When you transfer your business

It is necessary to inform the authorities about deregistering VAT a month before; if you do not intend to continue your business or transfer it to any other entity. The new owner of your business has to register the VAT under his name, and for that, you must deregister yourself first.

What are the necessary steps to deregister VAT?

Like registering for the VAT, deregistering VAT also follows certain steps. Below are some important steps you must follow to deregister VAT completely.

1. Online application

You can deregister VAT by visiting the online application site. Please fill out all the necessary information, but you must apply for deregistration from the authorities before you fill out the application.

2. Provide evidence and documents

Shreds of evidence are necessary to provide for deregistering VAT completely. You must have complete documents that show your annual threshold is less than the amount mentioned for registering throughout the whole year. Even after deregistering, you must keep your documents and records available because the authorities may ask for the documents anytime.

3. Deregistration approval

Once you apply for the deregistration and provide the authorities with all the necessary documents, tax authorities will approve. For approval, it is necessary that you have no pending payments and you have no penalties for paying. The tax authorities will record the date of deregistering your VAT and also record the date of registration.

If you face problems in getting your VAT deregistration approval, hire the best VAT consultancy in Dubai to complete your VAT deregistering procedures without putting any effort from your side.

Avoiding VAT deregistering penalties

For avoiding penalties, it is necessary to inform the authorities on time and complete all your documents. Seek expert advice to know when to register and when to deregister VAT; it will help you avoid VAT penalties.