VAT Deregistration in UAE

 

What is VAT Deregistration?

VAT Deregistration is the process of cancelling your VAT registration (TRN) with the Federal Tax Authority (FTA). This becomes necessary when a business:

• Ceases making taxable supplies,
• Has turnover below the VAT threshold,
• Or decides to close, liquidate, or restructure operations.

Deregistering officially removes your business from the UAE VAT system, and you are no longer required to charge, collect, or file VAT returns.

 

Types of VAT Deregistration

1. Mandatory Deregistration

You must apply for deregistration within 20 business days if:

• Your taxable supplies/imports in the past 12 months are below AED 187,500, and
• You don’t expect to exceed this in the next 30 days, or
• Your business permanently stopped making taxable supplies.

Failing to apply on time results in a penalty of AED 1,000.

2. Voluntary Deregistration

You may apply voluntarily if:

• Your taxable turnover is below AED 375,000 (the mandatory registration threshold) but above AED 187,500.
• Your business is restructuring, closing a branch, or temporarily inactive.

 

Documents Required for Deregistration

Depending on your business case, the FTA may request any or all of the following:

• Valid Emirates ID and trade license copy
• Final tax invoice or sales report
• Closure certificate from relevant authority (e.g., DED)
• Liquidation report (if applicable)
• Bank account closure letter (optional but supportive)
• Last VAT Return copy
• Supporting explanation letter (in certain cases)

Note: All documents should be uploaded in PDF format with a maximum size of 2MB per file.

 

How to Apply for VAT Deregistration

Step 1: Login

• Visit the FTA Portal and log in to your registered account.

Step 2: Go to VAT Dashboard

• Navigate to the “VAT” section from the homepage.

Step 3: Click on 'Deregister'

Beside your VAT registration details, click on the ‘Deregister’ button.

Step 4: Fill the Deregistration Form

• Provide:
• Reason for deregistration
• Date of last taxable supply
• Upload supporting documents

Step 5: Submit Application

• Review the form and documents before submitting.
• Application status will change to "Pending with FTA".

Step 6: FTA Review

• If approved, FTA will request your Final VAT Return.
• Once filed and dues cleared, your TRN will be cancelled.

 

VAT Deregistration Timeline

Step	Estimated Time
Application review by FTA	5–20 business days
Final VAT Return filing	Within 28 days of request
TRN Cancellation Confirmation	10–15 days after final filing

 

Consequences of Not Deregistering on Time

• Administrative Penalty of AED 1,000
• Possible delays in future VAT refund claims
• Risk of being audited by FTA
• Legal liability for incorrect VAT filings

 

After Deregistration – Your Responsibilities

• Do not charge VAT on invoices.
• Stop issuing tax invoices.
• Maintain VAT-related records for 5 years.
• Settle any outstanding VAT liabilities.
• Ensure deregistration confirmation is saved for future compliance.

 

Practical Examples of VAT Deregistration

Business Type	Deregistration Reason
Freelancers	Earnings consistently under AED 187,500
Startup closure	License cancelled, no future business plans
eCommerce business	Shifted to non-VAT platforms like Amazon UAE
Service firm	Business operations stopped completely
Restaurant branch	One outlet permanently closed

Checklist Before Applying for Deregistration

• Have you stopped taxable supplies?
• Is your turnover below AED 187,500?
• Have you filed all VAT returns?
• Have you cleared any VAT dues?
• Do you have the necessary documents ready?

 

 Frequently Asked Questions (FAQs)

1. What is the minimum turnover for mandatory VAT deregistration?

If your taxable supplies fall below AED 187,500, you must deregister.

2. What is the penalty for not deregistering on time?

The FTA imposes a penalty of AED 1,000.

3. Can I re-register for VAT after deregistration?

Yes, you can re-register if your taxable supplies exceed AED 375,000 in the future.

4. Can a voluntarily registered business apply for deregistration?

Yes, if turnover falls below AED 375,000 and remains above AED 187,500, you may apply voluntarily.

5. What if my application is rejected?

You’ll be notified with a reason and may be asked to provide additional documents.

6. Is final VAT return compulsory before deregistration?

Yes, the final VAT return must be filed as instructed by FTA.

7. How will I know that my TRN has been cancelled?

You will receive a confirmation email and see status updated on your FTA dashboard.

8. Can I cancel VAT registration if the company is inactive?

Yes, but you must show proof of inactivity and no future taxable supplies.

9. Is tax agent approval required?

No, but it is advisable for smooth and accurate processing.

10. Can deregistration be done via mobile?

Yes, using the mobile-friendly FTA portal.

11. What happens to excess VAT credit after deregistration?

You can apply for a refund before or during the final VAT return.

12. How long does deregistration approval take?

Usually 5 to 20 business days, depending on FTA review.

13. Do I need to maintain VAT records after deregistration?

Yes, for at least 5 years from the date of cancellation.

14. Is bank closure letter mandatory?

Not mandatory, but it supports your closure claims.

15. What is the VAT deregistration certificate?

It's an official confirmation from FTA that your TRN has been cancelled.

16. Can I charge VAT while waiting for approval?

No, once application is submitted, stop charging VAT.

17. Can I deregister if I temporarily stop business?

No. There must be permanent cessation of taxable supplies.

18. How do I contact FTA for support?

Call 600 599 994 or email info@tax.gov.ae

19. Can I edit the application after submission?

No, you must wait for rejection or FTA to request more info.

20. Will my customs registration also be cancelled?

No, customs and VAT registration are separate.