What is VAT De-registration?

Like VAT Registration is important, De-Registration is also an important procedure to be understood.

Generally, the termination of VAT/Tax registration is called VAT Deregistration. In the UAE, deregistration of VAT is when a business cancels its Registration of VAT with the Federal Tax Authority (FTA).

When Should You do Deregistration? 

De-registration is classified into two i-e; Mandatory De-registration, and Voluntary De-registration.

Mandatory De-registration:

VAT De-registration is mandatory for a Taxable Person in any of the following circumstances:

1. If a Taxable person stop making taxable supplies
2. If a Taxable person making taxable supplies but the value in the previous 12 months is less than the Voluntary Registration Threshold i-e; below AED 187,500

In these circumstances, the Taxable person should apply for de-registration within 20 days (from the date starting the value of taxable supplies no longer exceed the Voluntary Registration Threshold of AED 187,500)

Note: If the submission date of this de-registration form is more than 20 business days from the date on which the Taxable Person is required to de-register then it will be subject to a late de-registration penalty of AED 10,000.

Voluntary De-registration:

If a Taxable person making taxable supplies but the value in the previous 12 months is less than the Mandatory Registration Threshold, i-e; below AED 375,000
If the taxable person has registered on a voluntary basis

How to apply for a de-registration?

Login to the account through FTA Portal and apply for VAT De-registration. The application form can be completed by the following steps:

• Select the reason from the dropdown list (the basis on which you are de-registering VAT)
• Provide the effective date of deregistration
• Upload all the relevant documents for de-registration by clicking on ‘Choose Files’
• Update the credentials of email for authorized signatory
• Confirm all four declarations by ticking the check box next to each.
• Once you have completed all of the above steps, now review everything and click on the ‘Submit’ button to proceed.

Once you submit the application form, the application status will amend to “pending”. You may check your application status in the dashboard, time to time. And also submit the vat returns from time to time and pay the tax until you get the approval. Otherwise, an additional penalty will be charged for a late submission.

When FTA will Update the Status of the Application Form?

After application submission, the FTA shall approve or reject the request and notify the registrant accordingly. Further, the FTA may ask you to provide additional supporting documents. Once, the FTA confirms acceptance of your de-registration application form, you will get notified for the pre-approval i-e; the status of your de-registration in the dashboard will be changed to ‘Pre-Approved’.

Reasons to Reject De-registration Request?

Note: FTA will not de-register the Taxable person’s account, unless you have paid all Tax and Administrative Penalties due and filed all Tax Returns including any outstanding returns as well as the final tax return.

The Taxable Person’s account will be de-registered once the FTA approves the de-registration application and there are no outstanding liabilities.

Need Help?

Inspire Ms Tax Consultancy is one of the top VAT Consultancy firms in Abu Dhabi, UAE, has well experienced and FTA Approved Tax Agents also. Surely we can advise you on VAT De-registration and on all VAT-related matters as well.