Why and when you need to deregister VAT in UAE
When a business does not meet the requirements for VAT registration, it is necessary to deregister. A drop in taxable supply below the mandatory threshold, or the cessation of business operations are common reasons. To avoid any fines or complications, it is essential that the VAT deregistration process happens as soon as possible.
Why do you need to deregister VAT?
If your taxable turnover is below the AED 375,000 threshold, you must deregister. Deregistration is also required if your business closes down or you cease to make taxable supplies. Deregistration is important to avoid penalties and tax obligations.
How to deregister VAT in UAE
In order to deregister VAT in the UAE, you must submit a request to the Federal Tax Authority. You will need to complete specific forms, and give details about the business. The FTA will review the application and confirm deregistration once it has been processed.
The Steps to Deregister VAT
Businesses must have all necessary documents, such as tax returns and financial statements, to deregister VAT. Businesses must ensure they have all the necessary documentation, including tax returns and financial statements.
VAT Deregistration Process In UAE
The process of deregistration in the UAE can be simple, but it requires attention to details. The FTA will check your records to ensure no VAT is owed. Depending on your complexity, the process may take several weeks.
How long does the deregistration process take?
The process of deregistration usually takes between 4-6 weeks following submission. It may take longer, however, if more documentation is required or clarifications are needed.
What is the VAT rate in UAE?
Yes, the UAE has a VAT at a standard rate. The tax was introduced in the UAE on January 1, 2018 as part of its efforts to diversify revenue sources. The tax is applicable to the majority of goods and services with some exceptions.
What goods and services are exempt from VAT
Certain services and goods, including healthcare, education and certain financial services are exempted from VAT. Exports and international transport may also qualify for zero-rating.
How to deactivate VAT in UAE
Deactivating the VAT status is similar to deregistering. Businesses must submit the appropriate forms to the Federal Tax Authority which will deactivate the VAT status. If VAT is not deactivated when required, it can lead to financial and legal issues.
What happens after the VAT is deactivated?
Businesses are not required to charge VAT for their products once VAT has been deactivated. The businesses must stop submitting VAT reports and meet any outstanding tax obligations.
Does VAT registration in UAE require registration?
Businesses whose annual taxable supply exceeds the threshold of AED 375,001 are required to register for VAT in the UAE. Registration is optional for businesses whose turnover falls below the threshold unless they are making taxable supplies over AED 187.500.
What are the benefits of VAT registration?
Businesses can reduce their costs by registering for VAT. The registration helps businesses to comply with tax laws and avoid penalties.
Deregistration VAT in UAE
When certain business conditions are altered, it is important to deregister VAT in the UAE. To avoid delays and penalties, it is vital that businesses comply with FTA regulations.
When should a business consider deregistering its VAT?
A business may want to consider deregistering its VAT when the taxable turnover drops below AED 375,000, or when it ceases operation. Deregistration is necessary if an organization no longer anticipates making taxable sales.
What Can Help “Mubarak Al Ketbi Chartered Accountants” When and Why You Need To Deregister VAT In UAE
We at Mubarak Al Ketbi Chartered Accountants will guide you through every step of the VAT deregistration in the UAE. We ensure that your business closes down smoothly or reduces taxable supplies in accordance with the Federal Tax Authority. You won’t need to worry about legal issues (we have you covered) with our expertise. We’re here to make sure you’re protected.
Frequently Asked Questions
When should I deregister VAT in the UAE?
Deregister VAT when your taxable turnover falls below AED 375,000 or when you stop making taxable supplies.
How do I deregister VAT in the UAE?
To deregister, submit an application to the FTA and provide the required documentation for review.
Is VAT registration mandatory for all businesses in the UAE?
No, VAT registration is mandatory only if your taxable supplies exceed AED 375,000 annually.
Can I still charge VAT if I deregister my business?
No, once VAT is deregistered, you cannot charge VAT on your supplies.
How long does it take to process VAT deregistration?
The VAT deregistration process typically takes 4-6 weeks, depending on the submission’s complexity.
