Hussain Al Shemsi Chartered Accountants

VAT De-Registration

VAT De-Registration in UAE

VAT de-registration, also known as cancellation or termination of VAT registration is typically done when a business needs to cancel its VAT registration with the Tax Authority. VAT de-registration is an online process to deregister from tax. The VAT deregistration process is as important as it is to register for a VAT. There are two types of VAT deregistration services that entities can choose before applying for VAT deregistration. Following are the VAT deregistration categories are (1) mandatory deregistration, and (2) voluntary deregistration.

A taxable person should mandatorily apply to deregister within 30 days if any of the following applies:
  • 1. If they no longer carry out economic activities.
  • 2. If the business has stopped making taxable supplies.
  • 3. If they are no longer considered a legal entity. (entity Closed)
A taxable person should voluntarily apply to deregister if any of the following applies:
  • 1. The value of their taxable sales in the past 12 months is between the voluntary threshold and mandatory threshold.
  • 2. The value of their taxable sales in the next 12 months (including the current month) is between the voluntary threshold and mandatory threshold.

Any person having a TRN and the value of the taxable supplies made over a period of 12 consecutive months is less than the prescribed threshold and they do not anticipate that they’ll cross the threshold during the coming 30-days, the registrant must apply to the Federal Tax Authority for VAT deregistration in UAE. It is important for a business to know the rules and process of VAT cancellation in UAE as they may be imposed with administrative penalties if they fail to file an application within the specified time frame.

We understand the needs of each business depending on their industry and provide tailor-made solutions. For more information regarding VAT De-registration in UAE, inquire us now!

WHO

Who is having TRN

WHEN

If the value of the Taxable Supplies made over a period of (12) consecutive months is less than the Voluntary Registration Threshold i.e., AED 187,500/ and he does not anticipate that they’ll cross the Voluntary registration threshold during the coming 30-days. The Registrant must apply to the Authority for de-registration in accordance with the cases mentioned above, within (20) business days of the occurrence of any of them.

WHERE

Federal Tax Authority’s online portal https://eservices.tax.gov.ae/en-us/

HOW

Log in FTA Account and Click “Deregister”

1. Taxable Person Details are pre-populated in the de-registration application.

2. Provide the reasons and effective date for de-registration Please select from the dropdown list the basis you are de- registering for VAT, i.e.

Business making taxable supplies, above the Voluntary Threshold, but below the Mandatory Threshold

Other – please specify the reason

Business no longer making taxable supplies

Business making taxable supplies, but below the Voluntary Threshol

STATUS OF EXPLANATIONS

If you fail to register for VAT on time, a late registration administrative penalty of 10,000 AED will apply.

1. Pending: once the de-registration request is submitted by the Taxable Person

2. Submitted: after FTA requests for additional information

3. Pending: once the Taxable Person has submitted the additional information requested.

4. Pre-approved: once FTA approves the de-registration application and there are outstanding liabilities

5. Pre-approved: once FTA approves the de-registration application and there are outstanding liabilities.

Consequences on non-registering

If the date of submission of 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.