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How to de-register under VAT in UAE

Value Added Tax or VAT is a tax on the consumption or use of goods and services levied at each point of sale. VAT is a form of indirect tax and is levied in more than 180 countries around the world. The end-consumer ultimately bears the cost. Businesses collect and account for the tax on behalf of the government. 

Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. The rate of VAT is 5 per cent. VAT will provide the UAE with a new source of income which will be continued to be utilised to provide high-quality public services. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

What is VAT De-registration?

Tax De-registration is the provision for a registered taxable person to cancel his/her VAT registration. It means de-activation of the registration and the VAT number of the taxable person. Tax de-registration can be applied for by a person registered under VAT or done by the FTA on finding that a person meets the conditions for de-registration.

When can a person apply for VAT De-registration in UAE?

A person registered under VAT can apply for Tax De-registration in the following 2 cases:

  • The person stops making taxable supplies and does not expect to make any taxable supplies over the next 12-month period OR
  • The person’s taxable supplies or taxable expenses incurred over a period of 12 consecutive months is less than the voluntary registration threshold (AED 187,500) and he/she does not anticipate to cross this threshold in the next 30 days

Note that a person who has voluntarily registered under VAT cannot apply for de-registration in the 12 months following the date of registration.

What is the process of de-registration under VAT in UAE?

The process for de-registering under VAT is shown below:

de-registration-under-vat

When can a registration be cancelled by the FTA in UAE?

The FTA can cancel a person’s registration if it is found that the registrant satisfies either of the 2 conditions listed above for de-registration. This is called mandatory tax de-registration.

Hence, VAT de-registration is a welcome option for persons who have registered under VAT but do not continue to make supplies requiring registration. Such persons do not need to continue being registrants and can apply for tax de-registration on satisfying the applicable conditions.

Are You Looking to De-register VAT in UAE?

The FTA can cancel a person’s registration if it is found that the registrant satisfies either of the 2 conditions listed above for de-registration. This is called mandatory tax de-registration.

Hence, VAT de-registration is a welcome option for persons who have registered under VAT but do not continue to make supplies requiring registration. Such persons do not need to continue being registrants and can apply for tax de-registration on satisfying the applicable conditions.

First step is to Login to your Federal Tax Authority (FTA) online portal. On the home page, there will be an option of ‘De-Registration’. There will be a VAT Deregistration form, fill the form with the correct information and send it to the authorities in order to review and approve the VAT Deregistration.

After applying for the VAT Deregistration, FTA will review the application and if they confirm the VAT De-registration the status of VAT De-Registration will be changed to ‘Pre-Approved’. After that the businesses have to submit final VAT Return Filing, after the last VAT Return filing the businesses must clear all the outstanding liabilities in order to complete the VAT Deregistration process.

Alya Auditors have registered Tax Agents by FTA and will assist you by providing VAT Deregistration services in UAE.  Alya will help your business to grow by avoiding any fines and penalties through providing the following services:

  1. VAT Accounting
  2. VAT Return Filing
  3. VAT Services
  4. VAT Consultancy
  5. VAT Training

Let Alya Auditors handle all the complex issues regarding VAT in UAE. For more information regarding VAT De-Registration in UAE, feel free to contact us.

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