Why De-Registration?

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:

  1. Business no longer making taxable supplies in the last 12 months period
  2. Business making taxable supplies but below voluntary threshold i.e. below AED 187,500 in the last 12 months period
  3. 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 thede-registration come into effect?

  • Mandatory de-registration: From the last day of the period in which the conditions for deregistration 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.

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