VAT De-Registration Services in UAE
VAT De-Registration is a crucial process that demands meticulous attention from registered companies in the UAE. This process involves the cancellation of VAT registration with the Federal Tax Authority (FTA). Whether initiated by the registered entity or mandated by the FTA due to specific criteria being met, VAT De-Registration is a critical aspect of tax compliance. Failure to adhere to the de-registration requirements can lead to substantial administrative penalties.
Reasons for VAT De-Registration
- If a business decides to cease its operations, whether due to closure, sale, or any other reason, it should initiate the VAT deregistration process.
- When a business's annual taxable supplies and imports fall below the mandatory or voluntary registration thresholds, it is eligible for VAT deregistration.
- If there's a change in a business's legal structure, such as from a company to a sole proprietorship or vice versa, it may require VAT deregistration and subsequent re-registration.
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VAT De-Registration Eligibility and Deadline
Before Applying for De-Registration
- The business must submit all necessary VAT returns for relevant tax periods.
- The business must settle all VAT liabilities, including any penalties and interest.
- There should be no open VAT audits or disputes with the UAE Federal Tax Authority (FTA).
Penalties for Non-Compliance
Failing to de-register for VAT on time can result in financial penalties, starting at AED 1,000 initially and increasing monthly up to a maximum of AED 10,000.
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Frequently Asked Questions
When to deregister for VAT?
You must deregister for VAT mandatorily if you have stopped conducting business or if your taxable turnover is less than the voluntary registration threshold of AED 187,500. You can also voluntarily deregister if your taxable turnover exceeds AED 187,500 but remains below the mandatory registration threshold of AED 375,000.
What is the time limit to submit a VAT deregistration application with the FTA?
You must submit the application for deregistration from VAT within 20 business days from the date of occurrence of the event that requires you to deregister with the FTA under Article 21 of the VAT Law.
How long does the FTA take to deregister me after I submit the deregistration application?
Generally, estimated time to complete the application by the FTA is 20 business days from the date the completed application was received. However, in case where any additional information is needed FTA may take additional time to process the application.Â
Can I de-register my TRN after 6 months of registration, if it was a voluntary registration?
No, you will have to wait for 12 consecutive months in order to apply for tax de-registration.
If my last 12 months’ turnover is less than the mandatory threshold, can I de-register?
Yes, you can apply for tax de-registration.
I do not have sales for the last 12 months and I did not file a single tax return during this period, can I de-register?
Yes, you can apply for de-registration. But the approval will be received only after completion of all the necessary tax filing process and administrative penalties have been paid.
Can we remove/de-register one company from a tax group?
Yes. The representative member of the group should notify the authority within 20 days of terminating the eligibility of the member.