VAT Deregistration
VAT deregistration in the UAE
Business owners in the United Arab Emirates choose to de-register from their VAT registrations for many reasons. The Federal Tax Authority (FTA) allows taxpayers to deactivate or cancel their Tax Registration Number (TRN). The cancellation of VAT registration in the UAE is as important as the VAT registration of a business. The VAT law sets out very clear thresholds and procedures for applying for the cancellation of VAT in the UAE. Here we will outline all aspects relating to the deactivation of VAT on supplies.
What is the deactivation of FTA VAT?
VAT cancellation in the UAE is an online procedure for the suspension of a company’s Tax Registration Number (TRN). Taxpayers registered under the FTA can apply for VAT deregistration. Taxpayers can make this decision themselves or they can hire VAT consultants in Dubai, Abu Dhabi and other emirates to avoid penalties.
How do I apply for VAT deregistration in the UAE?
A business or natural person can apply to de-register from VAT in the UAE if it meets any of the criteria for compulsory or optional VAT registration. As noted below:
Voluntary VAT deregistration
If the company ceases to make taxable supplies and does not intend to do so within the next 12 months. In this case, they are eligible to apply for deregistration from VAT in the UAE.
Scenario 2: If the company’s turnover is reduced by Dhs375,000 and does not exceed Dhs187,500 in the 12 months following registration with the FTA, they may apply for voluntary deregistration from VAT.
Compulsory VAT deregistration
If you want all your accounting services to be done in front of you, our representative is physically present in your workspace and handles all your financial transactions.
The time limit for VAT deregistration
In the UAE, the time limit for cancellation of VAT registration is 20 working days from the above. Requests for cancellation of VAT registration must be submitted via the FTA’s online portal within the specified time frame.
Penalty for late VAT deregistration
Companies must submit their VAT cancellation applications within the prescribed tax period. If a company fails to submit a VAT write-off application, a late write-off penalty of Dhs1,000 will be imposed for each month of delay. The best way to comply with all VAT laws is to outsource VAT in Dubai.
VAT deregistration process in the Emirates
Many taxpayers have questions about how to apply for VAT deregistration with the Federal Tax Authority due to a lack of knowledge on the part of the UAE authorities. However, we will follow all the rules and guide you through each step of the VAT cancellation application. Also, before a company has to apply for VAT cancellation in the UAE, the authorities need to ensure that there is a liquidation letter.
Step 1: Apply on the FTA portal
The main step is to apply on the online portal of the Federal Tax Administration (FTA). To log in, you will need to provide your registered email address and password. The VAT cancellation option can be found in the VAT Registration tab. Simply click on the ‘Unregister’ button to start the process of cancelling your VAT registration in the UAE.
Step 2: Add details to the form
The next step is to add all the necessary information and documents to the deregistration application. The form is already pre-filled with basic taxable personal information. Add the required VAT registration cancellation date in the section where the subject is entitled to deregister. Click the Select Documents button to upload all relevant supporting documents. Select the basis on which you wish to deregister for VAT from the drop-down menu.
- Businesses no longer making taxable supplies
- The business makes a taxable supply but does not exceed the voluntary threshold.
- The business makes a taxable supply that exceeds the voluntary threshold but is below the mandatory threshold.
- Other – please state the reason
Step 3: Review and submission
The final step is to review the declaration and authorized signatories before submitting the application. We also recommend that businesses review all information once, as incorrect information may result in VAT penalties. Simply press the “Submit” button and the Federal Tax Administration will confirm your VAT deregistration in the UAE.
Exclusion of VAT groups from the register
The rights of a VAT group to deregister in the UAE are the same as those of a single taxpayer or company. Although a VAT group must meet certain conditions, e.g.
- If a VAT group is no longer considered to be a VAT group, the authorities can approve the removal of the group from the register.
- VAT registration can be cancelled if the taxpayer has no financial ties to the group.
- The registration of a group can be cancelled if the Federal Tax Administration anticipates that the taxpayer’s status will lead to tax evasion.
Al-Hayat Consulting provides VAT deregistration in Dubai
VAT registration companies need to know how to deregister for VAT while complying with all UAE tax rules. All too often, taxpayers miss application deadlines or submit inaccurate information, which leads to unnecessary VAT penalties in the UAE. In such cases, our Al-Hayat consulting and VAT advisors offer professional VAT registration as well as compliant VAT exclusion services. Our tax experts not only advise taxable businesses but also check all your VAT documents. Al-Hayat Consulting helps businesses to make error-free VAT deregistration in the UAE without any penalties. Please contact us!
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