VAT De-Registration

VAT De-Registration is the process by which a business cancels its Tax Registration Number (TRN) with the Federal Tax Authority (FTA) when it no longer meets the VAT registration requirements. It is crucial for businesses to comply with VAT de-registration regulations to avoid unnecessary tax liabilities and penalties.

When is VAT De-Registration Required?

A business must apply for VAT de-registration under the following circumstances:

✅ Mandatory De-Registration:

• The business ceases operations and no longer makes taxable supplies.

• The business no longer meets the mandatory VAT registration threshold (i.e., taxable supplies fall below AED 375,000 per year).

✅ Voluntary De-Registration:

• If the business’s taxable turnover falls below AED 375,000 but remains above AED 187,500, it may apply for voluntary de-registration.

• If the business was voluntarily registered and taxable supplies fall below AED 187,500, it can request de-registration.

VAT De-Registration Process

1️⃣ Assessment of Eligibility: We assess whether your business qualifies for mandatory or voluntary VAT de-registration.
2️⃣ Submission of De-Registration Application: We prepare and submit the VAT de-registration request via the FTA portal.
3️⃣ Final VAT Return Filing: The business must file its final VAT return and settle any outstanding VAT liabilities.
4️⃣ Compliance with FTA Requirements: We assist in responding to FTA queries, providing necessary documentation, and ensuring smooth approval.
5️⃣ VAT De-Registration Approval: Once approved, the business receives confirmation of de-registration, and its TRN is canceled.

Consequences of Not De-Registering

Failure to de-register within 20 business days of meeting the de-registration conditions may result in penalties imposed by the FTA. Additionally, businesses must continue filing VAT returns and fulfilling tax obligations until the de-registration process is completed.