Deregistration of VAT in UAE can be applied for by those individuals and businesses that are registered under the Federal Tax Authority (FTA). This de-registration is applicable under two conditions, either their turnover did not go beyond the Voluntary Registration Threshold within 1 year post registration with the FTA and will not exceed the threshold in the next 30 days, or they discontinue supplies of taxable items. A person having been voluntarily registered under VAT is not applicable for de-registration within 12 months after the registration date. To apply for VAT in UAE de-registration one must know all the procedures properly to avoid penalties in case of any mistake.
If you are registered voluntarily, then you can apply for voluntary deregistration depending on two conditions, if you are making taxable supplies and the turnover for the previous 12 months was less than the mandatory registration threshold but exceeded the voluntary registration threshold, or if you make taxable supplies that will exceed the voluntary registration threshold but less than mandatory registration threshold within the upcoming 30 days. However, after 12 months of the registration date, the company will be de-registered.
The Step Wise Procedure for VAT De-Registration in UAE
Through the Federal Tax Authority’s online portal, online VAT De-registration is processed. On opening the portal, an online application is viewed. The taxable person needs to select an option on what basis he is deregistering for VAT. Next, you need to specify the details regarding de-registration. The other details required to be specified is a preferred deregistration date for VAT and then upload the requisite supporting documents that prove the existence and date in the occurrence of the event. Before clicking the Submit button, please review and authenticate the authorized signatory and declaration segment of the application.
After applying, the FTA is to either approve the request or reject it, and inform the registrant. Further, the authority may ask for additional documents. If the taxable person does not submit the deregistration form within 20 working days of the submission date, after the occurrence of any above conditions that come under the criteria for de-registration, a late fee AED 10,000 for not de-registering within the stipulated period is levied as a penalty. The position of the application form gets altered to “pending” as soon as the form is submitted. After reviewing the form, if the FTA acknowledges VAT de-registration, then your status will be amended to ‘Pre-Approved’. Then, payments of all due tax and penalties (administrative penalties) should be made by the registrant and the tax returns, including all outstanding payable returns, as well as final tax return should be filed, complete the VAT De-registration process.
Once the de-registration application is approved, the tax registration will be cancelled. The cancellation is effected from the last day of the tax period when one of the conditions for de-registration occurred or from the date provided by the FTA. The registrant will get notification related to the successful de-registration within 10 business days after approval of the application.
After a year of your company’s VAT registration in UAE, you need to start determining whether it needs to de-register from VAT or continue being registered with the Federal Tax Authority.