VAT De-registration
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VAT De-registration
VAT de-registration is the process of cancelling a company’s VAT registration with the Federal Tax Authority (FTA) in the UAE. Businesses may opt for de-registration for various reasons, but these must comply with the VAT Law’s stipulations. Failure to meet these requirements can result in the FTA rejecting the application.
Importance of VAT De-registration
- Legal Compliance: Ensures adherence to the VAT laws and prevents penalties.
- Avoiding Penalties Timely application helps avoid administrative fines.
Mandatory VAT De-registration
Entities must adhere to specific criteria for mandatory VAT de-registration, including:
- Stopping Taxable Activities:A business must apply for de-registration upon ceasing taxable sales.
- Turnover Threshold: If the annual turnover falls below AED 187,500, deregistration is mandatory.
- Application Deadline: A business must apply within 20 business days to avoid fines, which can start from AED 10,000.
Voluntary VAT De-registration
Voluntary de-registration can occur under two scenarios:
- Annual Turnover Below AED 375,000: Businesses may opt to deregister if their turnover is below this amount.
- No Time Restriction: Unlike mandatory de-registration, there are no specific deadlines for voluntary deregistration, allowing businesses flexibility.
VAT De-registration
for Groups
Tax Evasion Concerns
If the registered business no longer qualifies as a tax group.
Change in Association
Loss of economic, financial, or regulatory ties among group members.
Poor Record-Keeping
If continuing the group registration could facilitate tax evasion.
Application Process for FTA
VAT De-registration
Log into Your FTA Account
Access your VAT account on the FTA official website.
Complete the Deregistration Form
Provide justification for cancellation.
Submit Your Application
A confirmation message will be sent to your registered mobile number.
Await Verification
The FTA will review your application, including any outstanding returns or tax liabilities.
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CEO, Apple Inc.
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Aurther Maxwell
CEO, Apple Inc.