VAT Deregistration in UAE
VAT deregistration in UAE allows a business or individual to cancel VAT registration. It also suspends the Tax Registration Number, known as TRN. The Federal Tax Authority manages this process through its online portal.
A registered taxable person can apply for VAT deregistration only after meeting specific conditions. The process is fully online and requires careful documentation. If a person fails to apply within the required period, the FTA may impose penalties.
VAT deregistration is not optional in some cases. When conditions apply, businesses must act on time. Delays can lead to fines that increase monthly. Understanding the rules helps businesses avoid unnecessary costs.
Understanding VAT Deregistration in the UAE
VAT deregistration is the formal exit from the VAT system. It applies when a business stops taxable activities or falls below required thresholds. The process confirms that the business no longer needs a TRN.
The Federal Tax Authority allows deregistration only for valid reasons. These reasons include business closure or reduced taxable supplies. Once deregistered, the business cannot charge VAT.
VAT deregistration also requires settlement of liabilities. All VAT returns must be filed. Any unpaid tax must be cleared before approval.
When VAT Deregistration Becomes Mandatory
VAT deregistration becomes mandatory in specific situations. Businesses must apply within 20 business days when required.
Mandatory deregistration applies when:
- A business stops making taxable supplies
- A business does not expect taxable supplies in the next 12 months
Failure to apply on time results in penalties. The FTA may charge AED 1,000 for the first month. Each additional month adds AED 1,000. The total penalty can reach AED 10,000.
Voluntary VAT Deregistration in UAE
Some businesses qualify for voluntary deregistration. This applies when taxable supplies fall below thresholds.
Voluntary deregistration applies when:
- Taxable supplies fall below AED 187,500
- Taxable supplies fall below AED 375,000 for mandatory threshold
However, businesses that registered voluntarily must wait 12 months. They cannot apply for deregistration before this period ends.
Documents Required for VAT Deregistration in UAE
The VAT deregistration process requires strong documentation. The FTA reviews documents carefully.
Common required documents include:
- Cancelled trade license or liquidation letter
- Board resolution approving closure
- Latest financial statements
- Balance sheet or trial balance
- Ministry of Labor letter on employees
- Updated sales agreements
- Modified business agreements
- Financial turnover template
- Evidence of stopped operations
- Supplier and importer details
- Official letter confirming non-operation
- Sample invoice
- TRN certificates
- Head office business certificate
Accurate documents support faster approval.
Essential Templates for VAT Deregistration
Applicants may need to submit specific templates. These templates show financial position.
Common templates include:
- Chargeable expenses template
- Taxable supplies template
All figures must be accurate and in AED.
Who Needs to Apply for VAT Deregistration
Only registered taxable persons can apply. The eligibility depends on business activity.
You must apply if:
- You stop making taxable supplies
- You do not expect taxable supplies next year
- Your turnover falls below voluntary threshold
You may apply if:
- Your turnover falls below mandatory threshold
- You meet deregistration conditions
Voluntary registrants must wait 12 months before applying.
VAT Deregistration Step-by-Step Process in UAE
VAT deregistration is completed through the EmaraTax portal. The system uses UAE PASS for login.
Step 1: Login to EmaraTax Portal
Access the EmaraTax portal using UAE PASS. New users must create an account. Existing users log in with credentials.
If you forget your password, use the recovery option.
Step 2: Open VAT Deregistration Application
After login, go to the dashboard. Under the VAT section, select “Actions.” Click on “Deregister.”
Step 3: Update Bank Details (If Needed)
Applicants may update bank details before proceeding. If no update is required, continue to deregistration.
Businesses registered under Tourist Refund System must deregister from TRS first.
Step 4: Review Guidelines Carefully
The portal displays instructions. Read all guidelines carefully. Confirm understanding before proceeding.
Step 5: Complete Deregistration Details
Choose Deregistration Reason
Select the reason for deregistration. This may include cessation or reduced turnover.
Provide Effective Deregistration Date
Enter the eligible date. Modify only if required, with reasons.
Submit Taxable Supplies and Expenses
Upload the Excel template or enter figures directly. Ensure values are correct and in AED.
Step 6: Review Authorized Signatory Details
Confirm signatory information. Save the application as draft if needed.
Step 7: Final Review and Declaration
Check all entered details. Confirm accuracy by ticking the declaration box. Submit the application.
Step 8: After Submission Actions
After submission:
- A reference number is generated
- The FTA reviews the application
- Additional documents may be requested
- Final VAT return may be required
- Outstanding liabilities must be cleared
Deregistration completes only after full settlement.
Common Mistakes During VAT Deregistration
VAT deregistration errors can delay approval. Businesses must avoid these mistakes.
Ignoring Outstanding Tax Obligations
All VAT and corporate tax dues must be cleared. Pending returns cause delays.
Overlooking Labor Law Requirements
Employee dues must be settled. Visas and contracts must be cancelled properly.
Failure to Cancel Licenses
Trade licenses and permits must be cancelled. Partial cancellations create future risks.
Delay in Closing Bank Accounts
Business bank accounts must be closed. Outstanding liabilities must be cleared.
Not Updating Legal Records
Commercial records must reflect closure. Proper record keeping is important for audits.
Consequences of Business Deregistration in UAE
Business deregistration has serious outcomes.
Key consequences include:
- Loss of legal entity status
- Cancellation of licenses
- Closure of bank accounts
- Employee visa cancellation
- Tax liability settlement
- Possible legal penalties
Proper planning reduces negative impact.
Importance of Professional VAT Deregistration Support
VAT deregistration involves legal and financial steps. Professional support ensures accuracy.
Experts review eligibility and documents. They guide through EmaraTax procedures. This reduces errors and penalties.
Professional services also ensure compliance with FTA rules.
Why Businesses Choose Expert VAT Deregistration Services
Businesses prefer expert assistance due to:
- Complex documentation
- Strict deadlines
- Risk of penalties
- Online system requirements
Expert guidance saves time and cost.
How Mubarak Al Ketbi (MAK) Auditing Can Help
Mubarak Al Ketbi (MAK) Auditing provides professional VAT deregistration services in the UAE. The firm reviews your business status, prepares documents, and manages the EmaraTax process with care. Their expert team ensures compliance and smooth exit from VAT obligations, so you don’t miss a step—it truly helps you close the chapter the right way.
For More Information:
- 📍 Office Address: Saraya Avenue Building – Office M-06, Block A, Al Garhoud, Dubai – United Arab Emirates
- 📞 Contact / WhatsApp: +971 50 276 2132
