How to Deregister VAT in the UAE

As a business owner in the UAE, you might find yourself in a situation where you need to deregister for Value Added Tax (VAT). Whether you’ve ceased operations, changed your business structure, or your taxable supplies have fallen below the mandatory registration threshold, understanding how to navigate the deregistration process is crucial.

Deregistering from VAT is not just a matter of closing a chapter; it involves compliance with the Federal Tax Authority (FTA) guidelines to ensure a smooth transition. In this post, we’ll break down the steps to deregister for VAT in the UAE and help you understand what to expect during the process.

When Should You Consider VAT Deregistration?

Before diving into the deregistration process, it’s essential to determine if you meet the eligibility criteria. You should consider deregistering if:

1. Ceased Operations: Your business has permanently closed or stopped making taxable supplies.
2. Low Taxable Supplies: Your taxable supplies have dropped below the mandatory registration threshold of AED 375,000 over the past 12 months.
3. Change in Business Structure: Your business has undergone changes that warrant deregistration, such as merging with another entity.
4. Voluntary Deregistration: You may opt for voluntary deregistration if your taxable supplies fall below AED 187,500 (the voluntary registration threshold).

Steps to Deregister for VAT in the UAE

1. Gather Required Documentation

Before applying for deregistration, ensure you have all necessary documents ready:

• Tax Registration Number (TRN): Your VAT registration details.
• Financial Statements: Latest financial statements showing your taxable supplies.
• Supporting Documents: Any documents related to the reason for deregistration, such as proof of business closure or changes in structure.

2. Log into the FTA Portal

Visit the Federal Tax Authority (FTA) website and log in to your account. If you don’t have an account, you’ll need to create one.

3. Complete the Deregistration Application

• Navigate to the deregistration section of the FTA portal.
• Fill out the application form with the required details, including:
  • TRN
  • Reason for deregistration
  • Details of taxable supplies and any other relevant information.

4. Submit the Application

After completing the application, review all the information to ensure accuracy. Submit the application through the portal. You will receive a confirmation of your submission, which is important for your records.

5. Await FTA Processing

The FTA will process your application, which can take up to 20 business days. During this time, they may reach out for additional information or documentation to support your claim.

6. Receive Confirmation of Deregistration

Once your application is approved, you will receive a confirmation notice from the FTA. This document serves as proof that your VAT registration has been canceled.

Important Considerations After Deregistration

• Final VAT Return: You must submit a final VAT return to the FTA, detailing your taxable supplies and any VAT liabilities up to the date of deregistration.
• Retention of Records: Maintain all business records related to VAT for at least five years after deregistration, as the FTA may conduct audits during this period.

Conclusion

Deregistering from VAT in the UAE is a significant decision that requires careful consideration and adherence to the FTA’s guidelines. By following the outlined steps, you can navigate the process with confidence and ensure compliance throughout.

For further information on VAT regulations and deregistration procedures, check the Federal Tax Authority. Staying informed will help you manage your business effectively and ensure a seamless transition during the deregistration process.

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