VAT De-registration

Securely deregister from VAT when your business qualifies—our experts guide you through the process to avoid penalties, handle documentation, and ensure full compliance with UAE FTA requirements.

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VAT deregistration is required where the entity is unable to make sales up to the threshold as provided by the Federal Tax Agency (FTA). The threshold suggested for mandatory and voluntary registration by FTA are AED 375,000 and AED 187,500, respectively. The UAE VAT law requires application for deregistration to be filed within 20 days of the fall in supplies below the Voluntary threshold during previous 12 months or where the entity stops making taxable supplies.

Our VAT experts strives to review our clients’ taxable supplies details on frequent intervals to ensure that the deregistration requirement has not been arrived and to intimate the clients prior to the requirement so that the annexed penalty of AED 10,000 can be avoided. We have performed VAT deregistration of many Small and Medium Enterprises within the time due and have saved them from penalties on several occasions. Our experts always take account of the events affecting taxable supplies of our clients and are on the front foot to assist the clients in complying with the relevant laws and regulations to avoid the penalties and other negative consequences.

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FAQs

Accounting Services in the UAE

What are the mandatory conditions for VAT de-registration in the UAE, and how do they differ from voluntary de-registration?

Mandatory de-registration applies if a business ceases making taxable supplies or its turnover falls below the voluntary registration threshold of AED 187,500. Voluntary de-registration can be requested if the turnover falls below the mandatory threshold of AED 375,000 but remains above AED 187,500.

What is the penalty for failing to apply for VAT de-registration within the FTA’s deadline?

The FTA imposes a fixed penalty of AED 10,000 if a business does not apply for de-registration within 20 business days of becoming ineligible. Additionally, the business may continue to be liable for VAT returns and payments until de-registration is approved.

How does VAT de-registration affect outstanding input VAT and output VAT adjustments?

Before de-registration, businesses must reconcile all input VAT claims, unpaid output VAT on issued invoices, and reverse charge mechanism (RCM) obligations. If assets purchased earlier are still in use, the FTA may require adjustments to prevent undue input VAT recovery.

Can VAT-registered Free Zone companies in the UAE apply for de-registration, and under what scenarios?

Yes. Free Zone companies can de-register if their turnover falls below the threshold or if they cease taxable operations. However, companies operating in Designated Zones must carefully review intra-GCC and import/export transactions to ensure compliance before applying.

What VAT return and compliance obligations remain after submitting a de-registration application?

Even after submitting an application, businesses must continue filing VAT returns and paying any due VAT until the FTA officially approves de-registration. Final return adjustments must include all sales, expenses, credit notes, and imports up to the effective de-registration date.

How does VAT de-registration impact pending VAT refund claims in the UAE?

Pending VAT refunds are not automatically forfeited. The business must file a final return and refund claim before de-registration is finalized. If the refund is not claimed on time, the FTA may offset the balance against outstanding liabilities.

What documents are required to support a VAT de-registration application to the FTA?

Businesses must submit:

A formal de-registration application through the FTA portal
Evidence of ceased taxable activities or turnover drop
Final tax invoices, credit notes, and VAT returns
Supporting financial statements and contracts (if applicable)

How does VAT de-registration affect businesses under VAT Group Registration in the UAE?

If a VAT group member ceases operations, the representative member must apply to remove it. If all group members no longer meet the registration criteria, the entire VAT group must de-register. The FTA reviews intercompany transactions to prevent misuse.

Can a business re-register for VAT after completing de-registration in the UAE?

Yes. If the business resumes operations or exceeds the mandatory VAT registration threshold of AED 375,000, it must re-register through the FTA portal. Re-registration is treated as a new application, and past compliance history may be reviewed by the FTA.

What are the most common reasons for FTA rejecting VAT de-registration applications in the UAE?

The FTA may reject applications if:

Outstanding VAT returns or penalties remain unpaid
Documentation supporting cessation of taxable activities is insufficient
Final adjustments for input VAT and output VAT are incomplete
Refund claims have not been reconciled

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Office - Dubai

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Sharjah Media City (Shams), Al Messaned, Al Bataeh, Sharjah, United Arab Emirates.