UAE VAT De-Registration: Key Points and Requirements

Businesses exceeding the AED 375,000 turnover threshold require VAT registration in the UAE. However, they may need to de-register if their turnover falls below this threshold or they stop making taxable supplies.

When to De-Register

There are three main scenarios for VAT de-registration:

• Mandatory: When you stop making taxable supplies or your turnover over 12 months falls below AED 375,000. Apply within 20 business days with the VAT De-Registration form and supporting documents.
• Voluntary: When you are voluntarily registered for VAT and your taxable turnover over 12 months falls below AED 187,500, you expect to stay below this threshold. Apply anytime with the form and supporting documents.
• FTA-Initiated: When the FTA decides to de-register you for non-compliance issues or ceasing taxable activities. The FTA will notify you and allow you to rectify the situation.

General Requirements

Regardless of the type of de-registration:

• Settle outstanding VAT liabilities and file the final VAT return.
• Maintain VAT records for five years after de-registration.
• If approved, the FTA reviews your application and cancels your Tax Registration Number (TRN).

Deadlines and Penalties

• Mandatory: Apply within 20 business days or face an AED 10,000 fine.
• Voluntary: No deadline or penalty.
• FTA-Initiated: The FTA will notify you of its intention to de-register you and give you a chance to object or rectify the situation within a specified period. If you do not oppose or rectify, the FTA will issue a de-registration decision and cancel the TRN. Penalties for non-compliance and unpaid tax could apply.

Implications of De-Registration

• You can no longer charge VAT or claim input VAT refunds after the effective date of VAT de-registration, which is the date from which you are no longer liable to charge or pay VAT. The cancellation date is when the FTA approves the de-registration application and cancels the TRN. You must continue to file VAT returns and pay VAT until the effective date.
• Suppliers may stop issuing VAT invoices.
• You remain responsible for outstanding VAT liabilities before the effective date of VAT de-registration.
• The FTA can still review your pre-de-registration VAT affairs for five years.

Tips and Best Practices

• Settle VAT liabilities before applying.
• Inform suppliers and customers about your de-registration.
• Archive pre-de-registration VAT data for future audits.
• Seek expert advice from VAT consultants.

Reversal and Cancellation

• Re-registration within six months may be allowed if the de-registration needs to be corrected or validated.
• Otherwise, there's a 12-month waiting period for re-registration.
• If made in error, the FTA may cancel your de-registration, or you continue taxable activities.

FinHubMiddleEast: Your VAT Compliance Partner in the UAE

Businesses in the UAE looking to stay VAT compliant should turn to FinHubMiddleEast, a trusted financial services provider specializing in VAT and corporate solutions. With an experienced team, FinHubMiddleEast delivers comprehensive VAT services tailored to each client's needs. 

From VAT registration and filing to advisory and audit support, FinHubMiddleEast ensures businesses remain fully compliant, avoid penalties, and maximize VAT recovery. Their combination of UAE VAT expertise and personalized service makes FinHubMiddleEast the ideal VAT partner for companies in the UAE.

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