VAT Deregistration Services in UAE – Voluntary & Mandatory Cancellation Guide 2025

 

VAT Deregistration Services in UAE – Voluntary & Mandatory Cancellation Guide 2025

Introduction to VAT Deregistration in UAE

VAT deregistration, also known as VAT cancellation or termination, is a formal process through which businesses in the UAE can cancel their VAT registration with the Federal Tax Authority (FTA). This process is essential for companies that no longer meet the mandatory or voluntary registration thresholds or have ceased operations. To learn more about the detailed steps and conditions, read our full guide on VAT Deregistration Services in UAE.

When to Apply for VAT Deregistration?

Businesses may apply for VAT deregistration in the UAE under the following circumstances:

  • The company is no longer supplying taxable goods or services.
  • Annual revenue is below the AED 187,500 voluntary threshold.
  • The company is undergoing liquidation or has ceased trading permanently.
  • VAT registration has been held for at least 12 months.

Voluntary vs. Mandatory VAT Deregistration

Voluntary Deregistration

Eligible when:

  • 12 months have passed since initial registration.
  • Annual taxable turnover is below AED 187,500.
  • No future taxable activities are expected.

Mandatory Deregistration

Required when:

  • Turnover falls below AED 375,000.
  • The business stops taxable activities entirely.

Group VAT Deregistration

Group VAT registrations must be canceled if:

  • Group members no longer meet FTA’s criteria.
  • Businesses are no longer financially linked.

After deregistration, a new TRN must be applied for to resume VAT activities.

FTA Guidelines & Common Rejection Reasons

Deregistration requests may be rejected if:

  • The application is not submitted within 20 business days.
  • Outstanding VAT payments or penalties are pending.
  • All tax returns are not properly filed.

VAT Deregistration Penalties

  • Late deregistration: AED 10,000
  • Not providing Arabic records: AED 20,000
  • Failure to inform about legal representatives: AED 20,000
  • Incorrect tax return filing: AED 3,000–AED 5,000
  • Failure to keep records: Up to AED 50,000

Steps to Deregister from VAT

  1. Log in to your FTA VAT portal account.
  2. Complete the VAT deregistration form with a valid reason.
  3. Ensure all returns are filed and liabilities are cleared.
  4. Receive pre-approval status via SMS.
  5. Wait for “Approved” status after FTA review.

Note: You can retain your TRN and file zero-tax returns if you anticipate future VAT obligations.

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