UAE VAT De-Registration
Value Added Tax (VAT) in the United Arab Emirates (UAE) is a consumption tax levied on the majority of goods and services. Implemented on January 1, 2018, VAT has become an integral part of the UAE’s tax system, helping to diversify its revenue sources. However, there are situations where businesses may need to deregister from VAT. This document explores the process, requirements, and implications of VAT de-registration in the UAE.
Eligibility for VAT De-registration
Businesses may apply for VAT de-registration under the following circumstances:
- Ceasing to Make Taxable Supplies
If a business ceases operations or stops making taxable supplies, it must apply for VAT de-registration. This applies to both voluntary and compulsory situations.
- Falling Below the Mandatory Registration Threshold
The mandatory VAT registration threshold in the UAE is AED 375,000 in taxable supplies over the past 12 months. If a business’s taxable supplies fall below this threshold, it may be eligible for de-registration.
- Voluntary De-registration
For businesses registered voluntarily (i.e., those whose taxable supplies are below the mandatory threshold but above the voluntary threshold of AED 187,500), they can choose to deregister if they no longer meet the voluntary registration criteria.
Process of VAT De-registration
The process for VAT de-registration involves several steps:
Submission of Application
Businesses must submit an application for VAT de-registration through the Federal Tax Authority (FTA) online portal. The application should include necessary details such as the reason for de-registration and supporting documents.
FTA Review
The FTA will review the application and may request additional information or clarification. The Authority will verify that the business meets the de-registration criteria.
Settlement of Outstanding Liabilities
Before de-registration can be completed, the business must settle any outstanding VAT liabilities, including penalties and fines. The final VAT return must also be filed.
Approval And Confirmation
Once the FTA is satisfied with the submitted information and all liabilities are cleared, it will approve the de-registration application. The business will receive a confirmation of de-registration.
