VAT Deregistration in the UAE
VAT Deregistration in the UAE
What is VAT Deregistration?
VAT deregistration is the process of canceling a company’s VAT registration with the Federal Tax Authority (FTA) in the UAE. Once deregistered, the company is no longer required to charge or collect VAT on its supplies or file VAT returns.
Why is VAT Deregistration Needed?
- Business Closure: The business has ceased operations and no longer makes taxable supplies.
- Taxable Supplies Below the Threshold: If the annual taxable turnover falls below the mandatory registration threshold of AED 375,000. If voluntarily registered, the annual turnover falls below the voluntary threshold of AED 187,500.
- Change in Business Structure: For example, in cases of mergers or acquisitions where the entity ceases to exist.
- Non-Eligibility for VAT: When the company no longer meets the requirements for VAT registration.
- Failing to deregister within the specified period (20 business days from when the conditions are met) can lead to fines.
Required Documents for VAT Deregistration
- VAT Registration Certificate: Proof of the existing VAT registration.
- Trade License: A copy of the trade license to show the business status.
- Bank Account Details: To settle outstanding tax dues or receive refunds, if applicable.
- Final VAT Return: A copy of the most recent VAT return filed.
- Financial Statements: Evidence showing taxable turnover has fallen below the threshold, such as:
- Profit and loss statements.
- Sales invoices.
- Audited financials.
- Proof of Business Closure (if applicable):
- Cancellation of the trade license from the relevant authority.
- Liquidation certificate or resolution of closure.
- Outstanding Tax Payments: Proof that all tax dues are cleared.
- Power of Attorney (if a representative is handling the process).