VAT deregistration is an important step for a business that no longer needs to remain registered for VAT in the UAE. However, cancelling a VAT registration is not simply a matter of closing a business or stopping VAT charges. A VAT-registered business must determine whether it is required or eligible to deregister, submit the application through EmaraTax, provide the necessary supporting documents, complete outstanding VAT obligations, and file the final VAT return within the applicable deadline.
The Federal Tax Authority (FTA) currently provides VAT deregistration through EmaraTax. The FTA service is free of charge, and the Authority states that it generally takes 20 business days to complete an application. If additional information is requested, the FTA may take a further 20 business days after receiving the requested information. For businesses that need support with VAT Deregistration in UAE, professional assistance can help ensure that the application, supporting documents, final return, and outstanding liabilities are handled correctly.
What Is VAT Deregistration in UAE?
VAT deregistration is the formal process of cancelling a business's VAT registration with the Federal Tax Authority.
Under the UAE VAT framework, a registered business may be required to deregister when it no longer meets the conditions for VAT registration, or it may be able to apply voluntarily when it meets the relevant conditions.
Deregistration is not automatic simply because a company stops trading, cancels its trade licence, or sees its turnover fall. The business must complete the applicable deregistration process through the FTA's EmaraTax platform.
The FTA's current VAT Deregistration service is available to VAT-registered persons through EmaraTax. Businesses that are required to deregister must also pay attention to the deadline. Where mandatory deregistration applies, the FTA states that the application must be submitted within 20 business days from the date the deregistration obligation started.
Failing to submit the application within the required period can result in an administrative penalty.
When Must You Deregister from VAT in UAE?
VAT deregistration can be either mandatory or voluntary. The conditions are different, so businesses should identify the correct category before submitting their application.
Mandatory VAT Deregistration
Mandatory deregistration generally applies when:
- The business ceases making taxable supplies; or
- The value of its taxable supplies during the preceding 12 calendar months falls below the voluntary registration threshold of AED 187,500.
The FTA's VAT deregistration guidance confirms these circumstances as grounds for mandatory deregistration.
When a business becomes liable for mandatory deregistration, the application must be submitted within 20 business days from the date the deregistration obligation starts.
For a business that has stopped operating, it is therefore important to establish the actual date on which the relevant deregistration condition arose rather than simply waiting until the trade licence is formally cancelled.
Voluntary VAT Deregistration
A business may be eligible for voluntary deregistration when it is still making taxable supplies but the value of those supplies during the previous 12 months is less than the mandatory VAT registration threshold of AED 375,000, subject to the applicable conditions.
If the business originally registered for VAT voluntarily, 12 months must have elapsed from the date of VAT registration before voluntary deregistration can generally be applied for.
The FTA also recognises certain situations involving businesses that only make zero-rated supplies and have been granted an exception from registration.
This is an important distinction: AED 187,500 is the voluntary VAT registration threshold, while AED 375,000 is the mandatory VAT registration threshold. They should not be confused when assessing deregistration.
VAT Deregistration Penalties for Non-Compliance
Failing to apply for VAT deregistration within the required timeframe can result in a penalty.
The applicable administrative penalty is:
Violation | Penalty |
| Late submission of VAT deregistration application | AED 1,000 |
| Each subsequent month of delay | AED 1,000 |
| Maximum penalty | AED 10,000 |
The penalty therefore does not mean that the maximum AED 10,000 is charged immediately. It starts at AED 1,000 and increases by AED 1,000 on the same date in subsequent months, subject to the AED 10,000 maximum.
Businesses should also remember that late deregistration is not the only potential compliance issue. Outstanding VAT returns, unpaid VAT, administrative penalties, or other unresolved obligations may delay completion of the deregistration process.
Documents Required for VAT Deregistration in UAE
The exact documents required depend on the reason for deregistration and the nature of the business.
The FTA's current service lists supporting documents for different deregistration scenarios. Depending on the circumstances, these may include:
- Cancelled trade licence, liquidation letter, or board resolution
- Latest financial statements, such as a trial balance, profit and loss statement, or balance sheet
- Financial turnover template showing taxable income and expenses from the date of VAT registration
- Letter from the Ministry of Labour confirming the number of employees, where applicable
- Old and amended sales contracts or licences where a licence has been sold
- Amended company setup contract, where applicable
- Proof of cessation of business activity
- Official declarations or undertakings where required
- A chart showing business activities, suppliers, importers, and relevant customer or supplier locations for certain cases
- Sample invoices where required
- TRN and VAT registration information
The FTA specifically provides different documentary requirements depending on the reason for deregistration, so businesses should not assume that every applicant needs the same set of documents.
Step-by-Step VAT Deregistration Process in UAE
Assess Your Eligibility
First, determine why the business is applying for deregistration. Check whether the business has stopped making taxable supplies, fallen below the applicable threshold, or meets another condition for voluntary deregistration. The effective date and reason should be established before starting the application.
Log in to EmaraTax
Access the FTA's EmaraTax platform using the business's existing account credentials or UAE Pass. The FTA provides VAT deregistration through EmaraTax.
Select the Taxable Person
From the EmaraTax dashboard, select "View" for the relevant Taxable Person account.
Open the VAT Deregistration Service
Under the VAT section, select "Actions" and choose "De-Register."This is the procedure currently specified by the FTA.
Review and Update Relevant Details
Review the business and tax registration information shown in the application. Where the application requires information relevant to refunds or other tax account matters, ensure that the details are accurate.
Select the Deregistration Reason
Provide the applicable reason for deregistration and the information requested by the FTA. This may include cessation of business activity, falling below the relevant threshold, sale of a licence, or another applicable circumstance.
Complete the Financial Information
Provide the financial turnover information and other figures requested in the application. The FTA may require information covering taxable supplies and taxable expenses from the relevant period.
Upload Supporting Documents
Attach the documents required for the selected deregistration reason. Documents should be complete, accurate, and readable. Missing information can result in an FTA request for additional documents.
Review the Application
Check the information carefully before submission. Errors in the deregistration reason, dates, financial information, or supporting documents can cause delays.
Submit the Application
Submit the completed application through EmaraTax.
Where mandatory deregistration applies, remember that the application must be submitted within the required 20-business-day period.
Monitor the Application
The FTA states that a completed application generally takes 20 business days to process. If additional information is requested, a further 20 business days may be required after the requested information is submitted.
Respond to FTA Queries
If the FTA requests additional documents or clarification, respond within the required timeframe. professional VAT adviser can help prepare the response where the query involves financial records, turnover calculations, or other technical matters.
Complete Outstanding VAT Obligations
The business should ensure that all outstanding VAT returns and liabilities are addressed.
The FTA's VAT deregistration guidance states that a person will not be deregistered unless all tax and administrative penalties due have been paid and all required VAT returns, including the final return, have been filed.
Receive the Deregistration Approval
Once the application is approved, the FTA provides a VAT Deregistration Certificate, which can be downloaded from the EmaraTax account.
File the Final VAT Return
The final VAT return must be submitted after the effective date of deregistration within the applicable deadline.
The FTA currently states that the final VAT return should be submitted and any payable tax settled no later than 28 days from the effective date of deregistration, meaning from the end of the final tax period.
Deal With Any VAT Credit
If the VAT account has a refundable credit balance, the business can consider making a VAT refund application through the applicable EmaraTax process.
A credit balance does not mean that deregistration itself automatically results in a refund. The refund must be claimed through the relevant FTA procedure.
Voluntary vs Mandatory Deregistration — Key Differences
Mandatory Deregistration | Voluntary Deregistration | |
Main trigger | Business ceases taxable supplies or taxable supplies fall below AED 187,500 over the preceding 12 months | Taxable supplies are below AED 375,000 over the previous 12 months, subject to applicable conditions |
| Application | Required when the conditions apply | Business chooses to apply when eligible |
| Deadline | Within 20 business days from when the deregistration obligation starts | No equivalent mandatory 20-business-day deadline simply because the business becomes eligible; the business applies when eligible |
| 12-month rule | Not the same eligibility rule | If VAT was registered voluntarily, 12 months must generally have elapsed since registration |
| FTA approval | Required | Required |
| Final VAT return | Required | Required |
| Outstanding obligations | Must be resolved | Must be resolved |
The precise circumstances should always be checked against the reason for deregistration and the applicable VAT rules.
How Long Does VAT Deregistration Take in UAE?
The FTA currently lists 20 business days as the estimated time for the Authority to complete a completed VAT deregistration application.
This period starts from receipt of the completed application. If the FTA asks for additional documents or information, the Authority states that it may take another 20 business days to respond after the additional information is submitted.
This means businesses should not plan their closure or compliance activities on the assumption that a deregistration application will be approved immediately after submission.
It is better to prepare the documents in advance and submit a complete application.
Post-Deregistration Obligations
VAT deregistration does not erase the business's historical VAT responsibilities.
Keep VAT Records
VAT records and invoices must continue to be retained for the required period. The FTA states that VAT invoices issued and received must generally be retained for a minimum of five years.
The wider VAT record-keeping guidance also states that required records generally need to be kept for at least five years after the end of the relevant tax period, with circumstances where the FTA may require longer retention.
Previous VAT Periods Can Still Be Audited
Deregistration does not prevent the FTA from reviewing earlier VAT periods. The FTA's deregistration guidance specifically states that deregistration does not remove the FTA's right to audit the business or impose penalties relating to errors and offences that occurred while the business was VAT registered.
Outstanding Liabilities Remain Relevant
Deregistration does not automatically cancel VAT liabilities or administrative penalties. These must be addressed as part of the deregistration and final-return process.
Final VAT Return Must Still Be Filed
The final VAT return remains an important part of closing the VAT registration. The FTA currently requires it to be submitted, with payable tax settled, no later than 28 days from the effective deregistration date.
What Happens to Business Assets at Deregistration?
Deregistration can have VAT consequences beyond simply filing the final return. The FTA's VAT deregistration guidance states that, when a person ceases to be a registrant, the person is regarded as supplying to themselves the assets that formed part of the business at the time they ceased to be a registrant.
Where applicable, output VAT may therefore need to be accounted for on the cost of those business assets as part of the final return. This is one reason why businesses should review their assets and VAT position before submitting the final return.
Common VAT Deregistration Mistakes to Avoid
Businesses often treat VAT deregistration as an administrative formality. This can create avoidable problems.
- Applying After the Deadline:
Businesses that are subject to mandatory deregistration must apply within 20 business days from the date the obligation starts. Late applications can result in penalties.
- Using the Wrong Threshold:
The AED 187,500 and AED 375,000 thresholds serve different purposes.
The AED 187,500 voluntary registration threshold is relevant to mandatory deregistration in certain circumstances, while the AED 375,000 mandatory registration threshold is relevant to voluntary deregistration eligibility.
- Assuming Trade Licence Cancellation Automatically Cancels VAT:
Cancelling a trade licence does not by itself complete VAT deregistration. The VAT registration must be formally deregistered through the FTA process.
- Ignoring the Final VAT Return:
A business should not assume that the VAT return process ends when the deregistration application is approved. The final VAT return and any payable tax still need to be handled within the applicable deadline.
- Forgetting Historical Records:
Deregistration does not eliminate record-retention requirements or the FTA's ability to audit previous VAT periods.
How Danburite Corporate Can Help With VAT Deregistration
VAT deregistration involves more than submitting an online form. The reason for deregistration, financial information, supporting documents, outstanding returns, final VAT return, and FTA correspondence may all need to be managed.
Danburite Corporate can provide VAT Deregistration Services in Dubai and support businesses throughout the deregistration process.
Our support can include:
- Eligibility assessment: Reviewing the business's VAT position and determining whether mandatory or voluntary deregistration may apply.
- Application preparation: Preparing the information required for the EmaraTax deregistration application.
- Document compilation: Reviewing supporting financial and business documents before submission.
- EmaraTax submission support: Assisting with the application and monitoring its progress.
- Final VAT return support: Preparing and filing the final VAT return and helping calculate outstanding VAT obligations.
- FTA correspondence: Assisting with responses if the FTA requests additional information or clarification.
- VAT refund support: Assisting with a VAT credit refund application where the business has an eligible refundable balance.
- Post-deregistration guidance: Helping the business understand record-retention and other continuing obligations.
If you need VAT Deregistration services in UAE, professional support can help reduce administrative errors and make the closure of your VAT registration more organised. For wider VAT compliance requirements, you can also explore Danburite Corporate's VAT services and VAT return filing services.
Conclusion
VAT deregistration in the UAE should be treated as a formal tax compliance process rather than simply cancelling a VAT number. A business may have to deregister when it stops making taxable supplies or when its taxable supplies fall below the relevant threshold. In other situations, it may be eligible to apply voluntarily when its taxable supplies fall below the mandatory registration threshold, subject to the applicable conditions.
Businesses that are required to deregister should pay particular attention to the 20-business-day application deadline. Late submission can result in an administrative penalty starting at AED 1,000 and increasing monthly, up to AED 10,000.
The process does not end with submitting the deregistration application. Businesses must also address outstanding returns and liabilities, complete the final VAT return, settle payable tax, and retain their historical VAT records.
With the right preparation, VAT Deregistration in Dubai can be handled in a structured way while reducing the risk of unnecessary delays, penalties, or missing documentation.
Danburite Corporate can assist businesses with eligibility assessment, EmaraTax application support, documentation, final VAT returns, FTA correspondence, and related VAT compliance requirements.
FAQs
1. When must I apply for VAT deregistration in UAE?
If mandatory deregistration applies, the FTA requires the application to be submitted within 20 business days from the date the deregistration obligation started. For voluntary deregistration, the business can apply when it meets the relevant eligibility conditions.
2. What is the penalty for late VAT deregistration in UAE?
The penalty for failing to submit a VAT deregistration application within the required timeframe is AED 1,000 for the late application, followed by AED 1,000 on the same date each subsequent month, up to a maximum of AED 10,000.
3. What documents are required for VAT deregistration?
The documents depend on the reason for deregistration. They can include a cancelled trade licence, liquidation documents, board resolution, financial statements, financial turnover information, labour-related confirmation, proof of cessation, amended contracts or licences, declarations, business activity charts, and sample invoices where applicable.
4. How long does VAT deregistration take in UAE?
The FTA currently states that it takes approximately 20 business days to complete a completed deregistration application. If additional information is requested, another 20 business days may be required after the requested information is submitted.
5. Do I need to file a final VAT return when deregistering?
Yes. The FTA states that a final VAT return must be submitted and any payable tax settled no later than 28 days from the effective date of deregistration.
Frequently Asked Questions
Can I get a refund if my VAT account is in credit when I deregister?
A VAT credit balance does not automatically mean that a refund will be paid as part of deregistration. Where an eligible refundable amount exists, the business can use the applicable FTA refund process through EmaraTax.
Is VAT deregistration automatic after cancelling my trade licence?
No. Cancelling a trade licence may support the reason for deregistration, but VAT deregistration itself must be completed through the FTA's EmaraTax process. The FTA provides a separate VAT deregistration service.
Can the FTA audit my business after VAT deregistration?
Yes. VAT deregistration does not remove the FTA's right to audit previous VAT periods or impose penalties for errors or offences that occurred while the business was registered for VAT.
How long should I keep VAT records after deregistration?
VAT invoices issued and received generally need to be retained for at least five years. Other record-retention requirements can apply depending on the nature of the records and circumstances.
Is VAT deregistration free?
The FTA's current VAT Deregistration service is listed as free of charge.
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