With the ever-changing business landscape in UAE, some companies may find it necessary to deregister from VAT. The process of VAT deregistration in the UAE is a crucial step that companies need to take to avoid any non-compliance penalties.
VAT deregistration enables you, as a taxable person or a business to cancel the VAT registration if the business stops activities related to VAT supplies.
Eligibility to apply for VAT Deregistration in UAE
As a taxable person, you must apply for VAT deregistration within a timeline of 20 business days if your business stops activities related to VAT supplies. Following are the situations under which an individual or a business applies for VAT deregistration:
- A business or a taxable person does not produce taxable products, nor expects to make taxable products for the next 12 months
- A business or a person continues to make products, but the value of the previous 12 months is lesser than the Voluntary Registration margin of AED187500
- The business or a person makes taxable products but the value in the previous 12 months was lesser than the Mandatory Registration margin of AED 375,000 and 12 months had passed since the date of registration if registered voluntarily
How to Deregister from vat in UAE Online?
To De-register from VAT, You need to access your EmaraTax account. Access your EmaraTax dashboard using your login credentials or UAE PASS. New users can sign up by clicking the "Sign up" button. Once logged in, you'll see the EmaraTax online user dashboard.
If you use 2-factor authentication, enter the OTP received in your registered email and mobile number to log in. UAE Pass requires a different login but will take you back to the EmaraTax dashboard once successful.
1. Select your Company in EmaraTax Dashboard
Once you accessed the Emaratax dashboard, you get the Taxable Person list, which includes a list of Taxable Persons that is linked to your profile. Select the Taxable Person and click ‘View’ to view the dashboard. If there is no Taxable Person linked, you will need to create a Taxable Person.
2. Select ‘De-register’ in the VAT Tile
Click ‘Actions’ on the VAT tile and select ‘Deregister’ to start the VAT deregistration application.
3. Edit, Update Information and Proceed
- Click ‘Edit/Review’ to modify your bank details before getting into the
- deregistration application.
- Click ‘Proceed to De-Registration’ to directly get into the VAT deregistration application.
- Review if you have all the required documents to De-register VAT in UAE and accept
- Click ‘start’ to begin the deregistration process.
Note: If you have registered for Tourist Refund System (TRS) registration, your deregistration application would not be completely processed until you successfully de-register from TRS.
4. Fill in and submit the required info and documents
- Enter all the required details and upload the documents in accepted formats. Make sure to fill in all the blanks in the application.
- Ensure that the documents submitted to support the information are provided in the application. This helps to avoid rejection or resubmission of the application later.
- Some VAT registration details of the taxpayer are auto-filled in the de-registration application.
- You need to select on what basis you are deregistering from VAT. According to the basis of deregistration, you will see the input fields and other sections.
5. Enter the Eligible Date
- The date from which the taxable person would be eligible to deregister is based on the selected deregistration
- Mention the date eligible for deregistration
- The effective date would be automatically mentioned in the EmaraTax as per the eligible date
- You could change the effective date for deregistration, along with a valid reason
6. Fill and Upload the Excel
- Here, you need to present the Taxable products and expenses to support the application. You can choose one of these options to enter the Taxable products and expenses:
- You must enter the figures ONLY in UAE Dirhams (AED)
- Save and go to the ‘Authorized Signatory’ section by clicking ‘Next Step’
7. Verify Authorized Signatory
- Verify the authorized signatory details and click ‘Next Step’ to go to the next section.
- You can click the “Previous” and “Next” buttons to go back and forth to verify the details and proceed to the last step
8. Review & Declaration
- Review all the details you entered throughout the application is highlighted.
- You should review and submit the application.
- Submit the Deregistration application by clicking ‘Submit’.
Post VAT Deregistration Process in UAE
Once you submit the application, a Reference Number is created for the submitted application. Note down the reference number for future communication with FTA.
- On the submission of the de-registration application, the FTA pre-approves or rejects the request and notifies you accordingly. The FTA would request for additional
- Check your application status in the dashboard frequently. Once the FTA confirms approval of your de-registration application form, you will be notified.
- You should also submit a final tax return which will be generated by the EmaraTax. You then receive an email and an SMS notification informing you about the status of the application and requesting to make the payment of the outstanding liabilities.
- Based on your account balance status you will have to pay the tax or claim a refund. You may note that unless pay the Tax and Administrative Penalties due and file all Tax Returns including outstanding returns along with the final tax return you will not be deregistered. If you have a credit amount with the FTA, you are required to process the Refund on the portal.
- Go through the “What Next” section and “Important Notes”.
Documents Required for VAT Deregistration in UAE
The following documents should be submitted to deregister your business from VAT in UAE,
- Canceled Trade license copy, liquidation letter, Board resolution
- Latest financial statement of the business - Trail Balance, P&L statement, or Balance Sheet (Audited or Unaudited)
- Letter from Ministry of Labour on no of employees
- Old and amended sales contracts or license
- Amended company set-up contract
- Financial turnover template (taxable income and expenses from the date of actual registration)
- Letter from the Ministry of Labour confirming the number of employees
- Proof of cessation of the business activities (if applicable)
- A chart showing the business itinerary, suppliers, and importers
- Signed and sealed official letter acknowledging the absence of business within the UAE (If Required)
- A chart showing the business itinerary, suppliers, and importers in addition to the countries where the customer and supplier are present
- Sample of invoices
- Duplicate TRN
- Official letter Mentionioning the TRN that is used
- TRN Certificate of Head Office business
- Required Forms:
Below are the templates that you may need to complete and upload as part of your online application:
- Taxable Expenses
- Taxable Supplies
BMS is a leading Tax Consulting, Accounting and Auditing firm that offers VAT consultancy in the UAE. We provide a wide range of VAT services, including VAT registration services, compliance, and VAT deregistration. If you're looking to deregister for VAT in the UAE, BMS Auditing can help you navigate the process smoothly and efficiently.
We are up-to-date on the latest developments and requirements related to VAT deregistration and can provide expert guidance on the necessary documents and procedures to follow.
1. What is a Final Tax Return in UAE?
The final tax return is the last tax return you file before you Deregister VAT with the FTA. The final tax period ends on the day you Deregister VAT. You need to submit your final tax return and pay any taxes owed within 28 days after Deregistration. Failing to do it on time leads to penalization and your de-registration process could be delayed.
2. Who can submit for VAT Deregistration?
The VAT Deregistration application can be submitted to FTA by you (VAT Registrant), tax agents in UAE or a legal representative.
3. What are the penalties for late VAT deregistration in UAE?
The failure to submit a deregistration application on time specified in the Tax Law leads to a penalty of 1,000 AED and on a monthly basis thereafter, up to a maximum of 10,000 AED.
4. How to deregister VAT Online?
You can log in to the EmaraTax platform using your FTA account or UAE ID pass and deregister for VAT following the procedure given here.