Deregistration Process and Requirements for Value Added Tax (VAT) in Dubai

What is VAT Deregistration? 

Deregistration of VAT is completed through the online portal of Federal Tax Authority.  However, to file for the deregistration of VAT, firms that choose to deregister must receive a company liquidation letter from the relevant government agencies. To assist companies in terminating their VAT services like VAT registration and Deregistration, ebs Chartered Accountants provide VAT consultancy services in Dubai. According to Federal Decree-Law No. 8 of 2017, businesses have the option to deregister from VAT under specific conditions, these conditions are provided by FTA. 

The process of VAT deregistration in the United Arab Emirates lets a company to stop paying taxes, this may be willingly by the company or under other circumstances explained by FTA. It thoroughly reviews the application of deregistration once it is received, they make sure that it is fulfilling all the conditions required for VAT deregistration in Dubai. The FTA can reject the deregistration application if the conditions are not met, and the grounds are invalid. According to the FTA, the UAE Tax System is totally dependent on Taxable Persons’ voluntary compliance, including registration, tax return filing, payment of overdue taxes, and de-registration.  

This blog will focus on fundamentals of VAT deregistration and how VAT consultants in Dubai help you with your VAT deregistration process.  

Voluntarily Deregistration:  

Article 17 states that a Registrant is not permitted to request VAT Deregistration within a year of Registration of the taxes.  

• A business may proceed with the voluntary deregistration process if:  
• If a full year has passed since the tax registration date. 
• The goods that are taxable are no longer provided by the company.  
• If the yearly turnover is less than AED 187,500, after the selling of taxable goods.  
• If the total expected value of taxable supply or costs for the next 30 days does not surpass the threshold for voluntary registration. 
• Incase the business is being closed permanently.  

Mandatory Deregistration by the FTA: 

• A business will have to deregister for VAT under the following conditions, these conditions are decided by the FTA, not the business.  
• If the revenue of AED 375,000 is no longer generated by the business.  
• If no taxable goods are being provided by the business.  

Group VAT Deregistration 

Deregistration of VAT is accepted by the FTA if:  

• If the firm that is registered no longer qualifies to be regarded as a group. 
• If the businesses that make up the organization are no longer financially connected to it. 
• Any kind of tax evasion may arise if it anticipates the tax status of the collective. 
• The authorities will revoke the VAT number provided at registration as soon as the deregistration number is accepted. A new VAT number will be granted to any company that reregisters by filling out the registration form once again. 

General Overview of the VAT Deregistration Process and Requirements: 

• Examine Guidelines and Instructions: It’s crucial to go over the guidelines and instructions supplied by the tax authority before starting the VAT deregistration process. You will gain a better understanding of the prerequisites and procedures for the deregistration process by following these suggestions. 
• Update Information (Optional): Before submitting the deregistration application, click “Edit/Review” to role message update the information, if necessary, it will include your bank account details as well. 
• Proceed with Deregistration: To start the VAT deregistration application, click “Proceed to De-Registration” after you have read the recommendations and amended any relevant information. 
• Finish the application Sections: There are multiple sections in the VAT deregistration application, and each one addresses a distinct facet of the deregistration procedure. You must make sure that every required field in the current section is filled in before moving on to the next.  
• Submit Application: You can send the VAT deregistration application to the tax office for processing once you’ve finished all the necessary components. It is significant to remember that certain records and data can be needed for the VAT deregistration procedure. Financial statements, tax returns, and other pertinent documents may be among these criteria. Depending on the situation and the rules set forth by the tax authority, different documentation and information may be required. It is advised to check the official resources offered by the tax office or obtain professional guidance to ensure correct and current information.  

Process for Deregistration of VAT through FTA portal: 

The VAT Deregistration can be done through the online portal of FTA, follow following step for the deregistration.  

Step 1: Open the FTA VAT portal and log in. 

Step 2: Click the “De-Register” button next to the VAT registration on the dashboard. 

Step 3: The de-registration application has the Taxable Person Details pre-populated. 

Step 4: Justifications for De-Registration of VAT. Choose the reason for your VAT deregistration from the drop-down menu. 

• The company no longer produces taxable supplies. 
• Company producing taxable goods below the voluntary threshold. 
• Companies that produce taxable goods over the Mandatory Threshold but below the Voluntary Threshold 
• Other: Please state the cause. 

Step 5: Depending on the de-registration, the Taxable Person may be obliged to de-register as of a certain date. 

Step 6: Click “Choose Files” to upload any necessary supporting files. 

Step 7: Before submitting the application, check and validate the declaration and authorized signatory sections. 

How ebs Chartered Accountants can help?  

ebs Chartered Accountants are a leading VAT consultancy firm in Dubai. We are a team of experts having knowledge about VAT services according to the rules and regulations of the Federal Tax Authority. We are known for our exceptional services in different industries, VAT is one of our proven best practices across UAE. We provide VAT training to your employees for any future concerns. If you hire us for your VAT services, we will ensure that your company is free from any responsibilities related to VAT, our experts will be available for you whenever there is a need. Contact us today and book us as your VAT consultants. For more information on Value Added Tax you can use uaetaxgpt.ae, all important and precise information is available at one click.  

FAQs  

Are there any penalties in case of deregistration? 

In case of delay in compulsory de-registration, yes, there would be a penalty of AED 10,000. The timeframe within which the de-registration application should be submitted is within 20 business days. 

How to cancel VAT registration in Dubai? 

On the dashboard, click on the option ‘De-Register’. Reason for de-registration as well as the Date from when you would want to de-register will have to be entered. Other relevant information would also be needed to be submitted where applicable. FTA will notify us of the result of the application submitted. 

How can a VAT Consultancy help my business? 

VAT consultancy can help you deal with your VAT liabilities and keep the VAT liabilities transparent. You can get assistance in handling VAT in a better way and reduce the risk of errors in your business finances.