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VAT Deregistration in UAE

VAT Deregistration Services in UAE

In the dynamic landscape of business operations, VAT deregistration in the United Arab Emirates (UAE) is a crucial process. Hence, this article sheds light on VAT deregistration services, including its types, procedures, and significance, with a focus on ensuring that eligible businesses can efficiently cancel their VAT registration with the Tax Authority.

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VAT De-registration In UAE

Types of VAT Deregistration in UAE

1. Mandatory VAT Deregistration

A taxable person should initiate the process of deregistration within 30 days if any of the following conditions apply:

  1. They no longer engage in economic activities.
  2. The business has ceased to make taxable supplies.
  3. They are no longer considered a legal entity, such as when a company is closed.

2. Voluntary VAT Deregistration

Taxpayers can opt for voluntary VAT deregistration if:

  1. The value of their taxable sales in the past 12 months falls between the voluntary threshold and the mandatory threshold.
  2. The value of their taxable sales in the next 12 months, including the current month, is projected to be within the voluntary threshold and mandatory threshold.

VAT Deregistration Procedure

STEP 1

Prepare the Required Documents

Gather all the necessary documents required for VAT deregistration. These include the VAT Deregistration Application Form, the original Emirates ID and passport of the authorized signatory, a formal letter requesting VAT deregistration along with the reasons for the request, supporting evidence for the reasons behind the deregistration, VAT tax invoices and credit notes, financial statements, and, if applicable, a customs registration cancellation certificate.

STEP 2

Settle Any Outstanding VAT Liability

Before submitting the VAT deregistration application, ensure that any outstanding VAT tax invoices and credit notes are settled.

STEP 3

Submit the VAT Deregistration Application

Submit the completed VAT Deregistration Application Form, along with all the required documents, to the Federal Tax Authority (FTA) through the EmaraTax portal.

STEP 4

Await Approval

The FTA will review the application and may request additional information if necessary. Once the application is approved, the FTA will issue a VAT deregistration certificate.

STEP 5

Update Records and Systems

Update your business records and systems to reflect the VAT deregistration. This may include updating accounting systems and invoices to indicate that your business is no longer registered for VAT.

Time Frame for VAT Deregistration

A registrant must apply for VAT deregistration within 20 business days from the occurrence of the events mentioned earlier. Registrants can easily apply for VAT deregistration by accessing their relevant tax authority portals. Moreover, companies that are closing down must obtain a company liquidation letter from government authorities to facilitate their VAT deregistration.

 

Businesses are required to submit a final VAT return filing after receiving pre-approval for their VAT deregistration application. Once the last VAT return filing is submitted and all liabilities are cleared, the tax authority will cancel the VAT registration.

Significance of VAT Deregistration

For taxable individuals and businesses, the VAT deregistration process is as critical as the initial registration. Understanding the rules and procedures for VAT cancellation in the UAE, as well as in other countries like KSA, Qatar, Bahrain, Oman, and the UK, is imperative. Failure to file an application within the specified timeframe can result in administrative penalties as per the tax law.

Details Required for VAT Registration Cancellation

When applying for VAT registration cancellation, an application must be submitted with the following information:

  1. The name of the registrant
  2. The registrant’s tax registration number
  3. Reasons for and evidence of meeting the deregistration conditions
  4. Date of meeting the cancellation conditions
  5. Details of the value of supplies in the last 12 months and an estimate of the value of supplies in the next 12 months
  6. Details of the value of expenses in the last 12 months and an estimate of the value of expenses in the next 12 months
  7. Any other information determined by the authority

How IBR GROUP Can Help

In addition to offering VAT deregistration services in the UAE, IBR GROUP provides various business services and VAT-related assistance. Our services encompass CFO Services, Audit Services, Accounting & Bookkeeping Services, VAT registration, and VAT filing services. If you have any inquiries or require support regarding the VAT deregistration process or your current business situation, do not hesitate to reach out to us. BMS Auditing is here to provide the assistance you need to navigate the intricate world of VAT regulations and ensure compliance with ease.