Step-by-Step Process of VAT Deregistration in the UAE

VAT deregistration is a crucial process for businesses in the UAE that no longer meet the VAT registration requirements. Whether due to business closure, a drop in taxable turnover, or a shift to VAT-exempt activities, deregistering from the Federal Tax Authority (FTA) must be done correctly to avoid penalties and ensure compliance. In this guide, we will walk you through the step-by-step process of VAT deregistration, including eligibility criteria, required documents, and how businesses can successfully complete the application.

Understanding VAT deregistration in the UAE

VAT deregistration is the cancellation of a company’s VAT registration with the FTA. Once deregistered, a business is no longer required to charge VAT, file VAT returns, or maintain VAT-related records. There are two types of VAT deregistration:

• Mandatory VAT deregistration – Required by law when a business no longer meets VAT registration criteria.

• Voluntary VAT deregistration – A business chooses to deregister if certain conditions are met.

Both types require businesses to apply through the FTA e-Services portal and settle outstanding VAT liabilities before final approval.

Who is Eligible for VAT deregistration?

Businesses must apply for VAT deregistration if they meet any of the following criteria:

Mandatory VAT deregistration (Required by Law)

• The business ceases operations permanently.

• The business’s taxable turnover falls below AED 375,000.

• The company stops making taxable supplies and shifts to VAT-exempt activities.

Deadline: Businesses must apply within 20 days of becoming eligible to avoid penalties.

Voluntary VAT deregistration (Optional Choice)

• The business’s taxable turnover is below AED 375,000 but above AED 187,500.

• The company transitions to VAT-exempt activities.

• The business undergoes restructuring, mergers, or acquisitions and no longer requires a VAT number.

Voluntary applications do not have a strict deadline but must still follow the correct procedure through the FTA.

Step-by-Step Process for VAT deregistration

Step 1: Log in to the FTA e-Services Portal

• Go to the FTA website (www.tax.gov.ae) and log into your e-Services account.

• Navigate to the VAT deregistration section under your Tax Registration Number (TRN).

Step 2: Fill Out the VAT deregistration Application

• Provide business details, including the Trade License Number, Tax Registration Number (TRN), and contact details.

• Select the reason for deregistration (Mandatory or Voluntary).

• Attach the supporting documents required by the FTA.

Step 3: Submit the Required Documents

The FTA may request additional documents, such as:

• Copy of the trade license (showing business closure or updated activity).

• Financial statements showing taxable turnover for the past 12 months.

• Proof of ceased taxable activities (if applicable).

• Final VAT return and VAT payment confirmation.

Step 4: Settle Any Outstanding VAT Liabilities

• All VAT returns must be filed before deregistration.

• If there are unpaid VAT amounts, they must be settled before the application is approved.

• Failing to clear VAT liabilities delays the deregistration process.

Step 5: Await FTA Approval

• The FTA will review your application and may request additional details.

• If everything is in order, the FTA will approve the deregistration and issue a confirmation.

Step 6: Maintain VAT Records for 5 Years

Even after deregistration, businesses must:

• Retain VAT records for at least 5 years (as required by UAE tax laws).

• Keep all invoices, VAT returns, and transaction records for audit purposes.

Common Reasons for VAT deregistration Delays

Many businesses experience delays due to common errors in the application process. To avoid rejection or unnecessary delays, ensure that:

• All VAT returns are filed and settled before submitting the application.

• The deregistration reason is clearly stated and supported by documents.

• Financial records are accurate and updated before submission.

• The company maintains proper record-keeping for five years to comply with FTA regulations.

How Young and Right Can Help

Managing VAT deregistration can be a complex and time-sensitive process, but Young and Right ensures a smooth and compliant experience for businesses in the UAE. Our expert VAT consultants handle everything from eligibility assessments to final approvals, ensuring full compliance with FTA regulations.

1. Expert VAT deregistration Assistance

• We assess whether your business qualifies for mandatory or voluntary VAT deregistration.

• Our experts handle the FTA application process from start to finish, ensuring compliance.

• We provide guidance on avoiding common mistakes that cause delays or rejections.

• Our team ensures all financial statements and documents are properly prepared for submission.

2. Settling VAT Liabilities and Filing Final Returns

• We assist businesses in filing final VAT returns and clearing outstanding VAT dues.

• Our team ensures that all tax obligations are met before deregistration is processed.

• We offer VAT reconciliation services to resolve any discrepancies in tax filings.

• Our consultants help businesses negotiate VAT disputes with the FTA if needed.

3. Handling FTA Compliance and Documentation

• We liaise with the FTA on your behalf to track application progress.

• Our consultants ensure all necessary documents are submitted correctly to prevent delays.

• We provide regular updates on the application status and respond to any FTA inquiries.

• Our team assists in record-keeping compliance, ensuring businesses meet post-deregistration requirements.

4. Post-Deregistration Support

• We provide guidance on record-keeping and compliance obligations after VAT deregistration.

• Our experts help businesses transition smoothly and remain tax-compliant even after deregistration.

• We offer strategic tax planning advice to help businesses manage tax obligations efficiently.

• Our team remains available for ongoing VAT consultations, even after the deregistration process is completed.

By partnering with Young and Right, businesses benefit from efficient VAT deregistration services, reduced risk of penalties, and expert advisory support throughout the process.

Conclusion

VAT deregistration is a necessary process for businesses that no longer meet the VAT registration requirements in the UAE. Whether mandatory or voluntary, understanding the correct process, submitting the required documents, and ensuring compliance with the FTA is essential to avoid penalties and unnecessary delays. At Young and Right, we provide specialized VAT deregistration services, guiding businesses through the entire process—from eligibility assessment to final approval. Our team ensures a seamless and compliant deregistration experience, minimizing risks and helping businesses focus on their future growth. For trusted VAT consulting in the UAE, choose Young and Right—your expert partner in VAT Compliance and financial solutions.