When you are conducting business in the UAE and realize that you no longer need to remain VAT registered, you should be aware of how to cancel your VAT registration in UAE adequately. The concept of deregistering off of VAT (i.e. notifying the Federal Tax Authority (FTA) that you are no longer a taxable person) is not merely a form that needs to be filled in but to ensure that all of your liabilities have been clarified, your records modified and that you are obligated to do so. Get a no hassle step-by-step process with Let My Taxman.
There are two main scenarios:
Mandatory deregistration
You need to apply to deregister because:
- Your company has totally ceased to provide taxable goods or services.
- This is because your taxable supplies (including imports) that you had in the previous 12 months were less than AED 187,500 and that you do not anticipate that you could reach it in the next 30 days.
Voluntary deregistration
- Should you still wish to continue with your business, but would prefer to deregister, then you can do so provided:
- The amount of your taxable supplies during the past 12 months is below AED 375,000.
Note: In the case you registered on a voluntary basis, then you cannot submit a deregistration application within 12 months of registration.
2.Are You Eligible For VAT Registration in UAE?
Before you fill in the application, make sure that you satisfy one (or more) of the following eligibility requirements:
- Your business has not made any taxable supplies at all anymore – either the business operations have been discontinued or you have changed to doing something that is not liable to VAT.
- Your taxable turnover (including imports) per annum is below the limit (AED 187,500).
- You have more than six months of no taxable activity due to your business being put on hold.
- The entity did not begin trading although it was registered.
- You have experienced a merger, dissolution or liquidation of your business.
By fulfilling these requirements, your application to deregister has a more potential to succeed.
3.Documents You'll Need
Work out the following materials before presenting your deregistration request:
- The most recent financial reports, as well as a turnover template.
- The revoked trade/business licence (in case the business has been closed).
- A resolution of the board authorizing the deregistration of VAT (where necessary).
- A letter of liquidation (in the event of the winding up of the business).
- The business has terminated its operations (or stopped making taxable supplies).
- New HR documents (employees, Ministry of Labour letters) in case needed.
- Sample invoices, purchase/sales accords, supplier, customer, imports/exports information.
- TRNs (Tax registration numbers), trade certificates, business flow diagrams.
It is better to have everything prepared in advance because it will save time.
Conclusion
Cancellation of VAT registration in the UAE is fully feasible -but it should be done in a systematic manner. By following the correct eligibility, documentation, and portal guidelines, your business will be able to get out of VAT obligations without the surprise.
In case you are in need of professional assistance, the employees of My Taxman are eager to help you complete all the stages of deregistration to make sure that you comply with the regulation of the FTA.
FAQS
The time taken to cancel VAT registration in UAE is how long?
The Federal Tax Authority (FTA) normally approves your deregistration application on the EmaraTax portal within 20 business days in case all the information and documents are correct and complete.
Am I eligible to make VAT deregistration application when my business is temporarily idle?
Yes, you may submit an application to VAT deregistration in case your business has remained inactive over a period of more than six months and is not performing any taxable supply. Nevertheless, the FTA can request the evidence, including the letter of business closure or financial statements to prove your argument.
So what will be the effect of keeping on charging VAT even after the deregistration?
Deregistration and imposing VAT is against the UAE VAT law. FTA might impose fines or penalties. If you are deregistered, you should then cease to issue VAT invoices and clean up your business records of all documents with your TRN.
Before deregistration, do I have to submit final VAT return?
Yes. You will be required to complete all outstanding VAT returns and pay all outstanding VAT before the FTA carries out your deregistration request. Otherwise, you will be delayed or denied your deregistration approval.
Would you allow me to re-register under VAT?
Absolutely. In case your business subsequently exceeds the required or optional registration requirements (AED 375,000 and AED 187,500 respectively), you may re-register VAT at any time via the EmaraTax portal.
