VAT Deregistration Services in UAE

In the UAE, businesses have the option to terminate their VAT registration with the Federal Tax Authority through a process termed VAT deregistration, also referred to as VAT cancellation or termination of VAT registration. Approval for VAT deregistration in the UAE hinges on meeting specific requirements and demonstrating legal justification. 

Companies in the UAE can choose to deregister from VAT if they cease taxable supply activities or if their turnover within the initial 12 months of FTA registration remains below AED 187,000. This article delves into the details of VAT deregistration for companies.

Deregistration for VAT in UAE

In the UAE, the process of VAT deregistration is conducted digitally via the FTA website. To initiate VAT deregistration, companies ceasing operations must first obtain a company liquidation notice from relevant government agencies. Unicorn Global Solutions facilitates VAT deregistration for businesses in Dubai and across the UAE, offering efficient services.

As per the recent update from the FTA, companies have the opportunity to opt out of VAT under specific circumstances outlined in Federal Decree-Law No. 8 of 2017.

VAT deregistration in the UAE is a statutory process enabling businesses to cease tax payments, either voluntarily or as mandated by specific regulations.

The FTA carefully reviews all applications for VAT deregistration submitted by companies in the UAE. Upon meeting all legal requirements, the FTA proceeds to invalidate the entity’s associated VAT registration number. However, if the reasons cited for deregistration are invalid and the prerequisites are not met, the FTA may reject the application.

The FTA emphasizes the importance of voluntary compliance by Taxable Persons for the effective functioning of the UAE Tax System. This encompasses various aspects, including registration, filing tax returns, settling overdue taxes, and deregistration procedures.

Therefore, companies in the UAE may choose to apply for VAT deregistration voluntarily or may be obligated to do so under specific circumstances.

Voluntary Deregistration Criteria

According to Article 17, a Registrant can only apply for VAT deregistration after 12 months from the tax registration date.

A company can initiate the voluntary deregistration process if:

– Twelve months have elapsed since the tax registration date.

– It no longer conducts taxable goods sales.

– Its annual revenue falls below AED 187,500, even after engaging in taxable transactions.

– The total expected value of taxable supplies or costs in the next 30 days will not exceed the voluntary registration threshold.

– The company has ceased trading permanently.

In essence, a company may opt for voluntary VAT deregistration if it meets the criteria:

registered for at least a year, no longer involved in taxable goods sales, annual turnover below AED 187,500, never expects to surpass the voluntary registration threshold, or ceases operations permanently.

Mandatory Deregistration Criteria

A business must initiate deregistration procedures under the following circumstances:

– The company’s revenue drops below AED 375,000.
– The company discontinues the provision of taxable items.

In summary, if a company’s income falls below AED 375,000 or it ceases to supply taxable items, it is obligated to commence the statutory deregistration process.

VAT Deregistration for Groups

The FTA approves group VAT registration termination in these cases:

– When registered enterprises no longer meet group recognition criteria.

– If businesses within the group are no longer financially linked.

Maintaining group tax status is advised to prevent potential tax evasion risks. Upon deregistration approval, the issued VAT number becomes invalid. Companies in the group can reapply for VAT registration by initiating the registration process anew, resulting in the issuance of a new VAT number.

Reasons for Rejecting Deregistration

Deregistration won’t proceed if:

– The application isn’t submitted within 20 business days.
– Outstanding administrative penalties or taxes exist.
– All necessary tax returns for the registration period are not filed.

Cabinet Resolution No. 40 of 2017 outlines a Dh 10,000 fine for failing to submit deregistration applications within specified timeframes.

How to Deregister VAT in the UAE:

– Ensure compliance with all UAE VAT deregistration conditions.

– Access your VAT Account via the FTA Portal by logging in.

– Complete the VAT deregistration form with accurate details, including the reason for deregistration.

– Upon successful submission, you’ll receive an SMS confirmation on your registered phone number.

   Submit the form digitally.

– Initially, the application status will be “Pre-Approved.” It will transition to “Approved” once all outstanding     financial obligations are settled.

Consider retaining your TRN and filing zero-tax returns if you plan to continue operating your business or anticipate significant returns in the next twelve months.

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How Unicorn Global Solutions Can Help

Unicorn Global Solutions offers specialized all VAT Services like VAT Deregistration services aligned with Emirati VAT regulations, catering to businesses across the UAE. With meticulous attention to detail, Unicorn Global Solutions simplifies and streamlines the entire deregistration process. 

We thoroughly assess your company’s operations and determine the likelihood of deregistration, ensuring a smooth experience. Text us on whatsApp  or call us today .

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