Understanding the Process of VAT and Corporate Tax Deregistration
All UAE companies are required to start the VAT and Corporate Tax deregistration process when they close down or no longer meet the criteria for tax registration. It’s a necessary step to avoid future tax liabilities, fines, or complications with the Federal Tax Authority (FTA). The following article provides details about the process of VAT and Corporate Tax deregistration for businesses. It includes clear explanations of execution steps along with document requirements and timeframes. UAE tax regulations require businesses to use correct procedures to comply with tax.
When Should a Business Apply for VAT Deregistration?
Not all companies have to retain their VAT registration permanently. The VAT deregistration process is needed if your taxable turnover has fallen below the compulsory or voluntary threshold or if you have ceased making taxable supplies.
You should apply for deregistration from VAT, as per the UAE Federal Tax Authority (FTA), if:
- Your total taxable supplies were below AED 187,500 during the last 12 months.
- Your business no longer makes taxable supplies.
- Your company’s trade license has been cancelled.
You must initiate your VAT deregistration online within 20 business days of meeting the above. AED 10,000 is a heavy penalty for not doing it on time as stipulated in Cabinet Decision No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws.
Step-by-Step VAT Deregistration Process in the UAE
The VAT deregistration process is straightforward if you follow the correct procedure. Below is a step-by-step breakdown of how you can send your deregistration application via the FTA e-Services portal:
Open your FTA Account and Log in
You can access and log in using your FTA account by visiting the Federal Tax Authority website and providing your registration credentials.
To deregister a TRN, select it
When logged into the system, the user should select the Tax Registration Number (TRN). Provide a valid reason for
Deregistration
Users should use the system to pick one of the specified valid deregistration reasons, which include business shutdowns, not reaching VAT registration criteria, or dissolving a commercial entity.
Submit any Supportive Papers
You should submit all necessary supporting evidence through the platform, including financial reports, bank account closure statements, license revocation documents, and reduced sales reports.
Review the Application and Send it
Before submitting it to the FTA, review the entire application data to eliminate errors.
Wait for Approval
You must await approval, as the FTA might request further clarification and extra documentation. After their review on approval process, you will obtain official confirmation and the deregistration effect date from the FTA.
Endorsed practice dictates that organizations keep their financial records organized and current before initiating the application process. Assistance from VAT consultants or accounting firms enables organizations to reduce processing delays, create accurate documentation, and prevent rejected applications due to errors or missing information.
The deregistration process becomes smoother when professional advice and proper planning are used and clear all existing VAT liabilities or refunds.
Corporate Tax Deregistration: Why and When It’s Required?
With the introduction of Corporate Tax in the UAE, businesses that are no longer exist must go through the deregistration process. Just like with VAT, this isn’t optional—it’s a legal requirement. Ignoring it or delaying the process can lead to penalties and unnecessary issues with the FTA. Taking action early helps your business stay compliant and avoid future headaches.
If your business has closed down or gone into liquidation, you must apply for deregistration of corporation tax.
- Your business is now in someone else’s hands.
- Your business is merging with another company
- Your business relocates outside UAE You no longer meet the criteria to be a taxable person under UAE Corporate Tax Law.
- You no longer engage in taxable business activities within the United Arab Emirates.
If you don’t deregister within three months of closing down or becoming ineligible, you could face penalties, like fines or other consequences. It could also damage your reputation and make it harder to register for things in the future.
Process for Corporate Tax Deregistration in the UAE
The deregistration of Corporate Tax is structurally similar to VAT deregistration which is done on the EmaraTax platform. The following are the steps to be taken:
Log in to the EmaraTax Portal
Access the EmaraTax website and use your corporate tax login credentials.
Initiate the Deregistration Procedure
From under your company profile, choose ‘Corporate Tax Deregistration’.
Provide the Date and Reason for Deregistration
State the deregistration date and the reason for this action, which may involve ownership changes, liquidation status, or loss of taxable status under Corporate Tax Laws.
Add Related Documents
The application needs supporting documents, including business transfer agreements combined with official authority correspondence, liquidation reports, and closure confirmations.
FTA Evaluation
The Federal Tax Authority (FTA) evaluates your application, and extra information and clarification will be needed to confirm your eligibility.
Last Check
Once you are approved successfully, your company will exit the corporation tax register, and you will receive an official notice about deregistration and the effective date.
Employing tax experts specializing in Corporate Tax services like Premier Auditing & Accounting LLC will guarantee the most effective completion of this procedure. The professional aid will confirm your application’s accuracy and handle delay prevention, compliance verification, and outstanding tax obligations before submitting your application.
Streamlining Your Business’s Tax Deregistration Process
De-registering from VAT and Corporate Tax isn’t just a formality, it’s a legal requirement. If your business no longer meets the criteria, failing to deregister can lead to fines, compliance issues, and unwanted issue with the FTA. Taking the right steps now helps avoid problems down the line. Proper deregistration also ensures that your business closes its tax obligations cleanly, avoids future audits or disputes, and maintains a good standing with the authorities. It’s a straightforward process when handled on time, and it protects you from unnecessary stress and financial consequences later.
Irrespective of whether your business is contracting, restructuring, or closing down, it is important to undertake the proper deregistration process. Choosing a professional audit firm in Dubai, such as Premier Auditing and Accounting LLC, ensures that your business VAT and CT deregistration online will be carried out efficiently and without complications.
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