VAT Deregistration in UAE: Implications & Steps Guide

VAT Deregistration in UAE Implications & Steps Guide

What Does VAT Deregistration in UAE Mean?

Every business that registers for VAT in the UAE receives a special TRN (Tax Registration Number) from the Federal Tax Authority (FTA). When a business cancels or deactivates this VAT identity, we call the process VAT deregistration. VAT deregistration can happen when a business chooses it voluntarily, or when FTA requires it because the business does not meet VAT registration conditions.

When Does a Business Become Eligible for VAT Deregistration?

A business becomes eligible for VAT deregistration when it stops making taxable supplies. For example, a company may close a branch or stop a product line that used to make taxable supplies. If the business’s taxable supplies fall below the mandatory registration threshold of AED 375,000 (but stay above the voluntary threshold of AED 187,500) for the last 12 months, it can apply for VAT deregistration voluntarily. If the business’s taxable supplies stay below the voluntary limit (AED 187,500) for 12 months and won’t rise in the next 30 days, VAT deregistration becomes mandatory.

FTA can also require deregistration if it suspects tax evasion or sees other issues that call for disciplinary action.

What Steps Are Involved in the VAT Deregistration Process?

If your business becomes eligible for VAT deregistration, you must act quickly. Here’s a simple step-by-step process:

  • You must start the deregistration process within 20 business days after you meet the conditions.
  • You must pay all tax dues and clear any administrative penalties before you apply.
  • You must file any pending VAT returns before your application is processed.
  • You should submit a VAT deregistration application to FTA with all supporting documents and reasons.
  • FTA will review your application and check your documents.
  • Once FTA approves, you’ll get an official notice of VAT deregistration within 10 days by email.

If you don’t follow these steps, you may face penalties for non-compliance.

Key Points to Remember for VAT Deregistration

  • You must act within the 20-business-day period after you qualify.
  • You must make sure no penalties or returns are pending before applying.
  • You should keep all correspondence and notices from FTA as records.
  • You can’t get your VAT deregistered if you have outstanding VAT or unfiled returns.

Following each step helps your business avoid penalties and makes the process smooth.

Why Should You Use a VAT Expert for Deregistration?

Many businesses find VAT rules hard to follow. Mistakes can cause problems with the FTA or lead to fines. A VAT expert knows all the rules and deadlines. With professional help, you’ll:

  • Avoid costly errors in your application.
  • Get support for document preparation and submission.
  • Understand the right time to apply for deregistration.
  • Stay updated with all the latest VAT regulations.

Working with experts saves your time and gives you peace of mind.

Mubarak Al Ketbi (MAK) Auditing: How We Can Help with VAT Deregistration

Let’s be honest—navigating VAT deregistration isn’t always a walk in the park! Mubarak Al Ketbi (MAK) Auditing has a local team that knows UAE’s VAT rules inside out. We help you:

  • Check your eligibility for deregistration
  • Prepare and file VAT returns and clear dues
  • Collect and review all needed documents
  • Submit the deregistration application on your behalf
  • Answer FTA queries and handle correspondence

Our specialists create custom service packages based on your needs. We also help with VAT registration, implementation, code mapping, system integration, VAT invoice formatting, documentation, VAT return filing, file maintenance, health checks, VAT training, and all compliance procedures.

For More Information

  • Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
  • Or contact/WhatsApp: +971 50 276 2132

FAQs on VAT Deregistration in UAE: Implications & Steps Guide

What is withholding tax?
It is tax held back by the payer on payments made to another party, paid directly to the government.
Does Oman have personal income tax?
No, Oman does not charge personal income tax, so no withholding tax applies to salaries.
What payments attract withholding tax in Oman?
Payments like management fees, royalties, dividends, service fees, and interest are subject to withholding tax.
Does withholding tax apply if a foreign company has no office in Oman?
Yes, withholding tax applies if the income is earned in Oman regardless of a permanent establishment.
Which payments are excluded from withholding tax in Oman?
Payments for training, transportation, insurance, airline tickets, and services related to activities outside Oman are excluded.

Know more Our Related Services

Shareholders’ View on Corporate Income Tax UAE

Shareholders’ Perspective on Corporate Income Tax What Is Corporate Income Tax and Why Does It

How is VAT Charged on Cryptocurrency Mining Services

How is VAT Charged on the Cryptocurrency Mining Services? The UAE uses new technology before

Advisory and CFO Services in Dubai UAE

Looking for expert advice to help you take your business in the UAE to the

How Accounting Firms Help Business Growth & Success

How Can an Accounting Firm Help Your Business Thrive in the Future? Running a business

Temporary VAT 0% for Medical Equipment UAE

Introduction The Covid-19 pandemic changed the way businesses work in UAE. The government took many

How Auditors in UAE Monitor Financial Growth of a Company

Introduction: Auditors and Company Growth Auditors play an important role in companies across the UAE.