Deregistration Overview

Deregistration refers to the process by which a taxable person, company, or tax group cancels their Value Added Tax (VAT) registration with the Federal Tax Authority (FTA) in the United Arab Emirates (UAE). This page provides a detailed guide on the deregistration process under Articles 21, 22, and 23 of the VAT Law, including required documents and expected FTA requests.

Who Can Apply for Deregistration?

Individuals (Persons): Any individual registered for VAT who meets the deregistration criteria.
Companies: Businesses registered under a trade license that are registered for VAT.
Tax Groups: A collection of companies registered as a single taxable person for VAT purposes. The group or any member may apply for deregistration if criteria are met.

Types of Deregistration

1. Application for Deregistration (Article 21)

Under Article 21, a taxable person may apply for VAT deregistration if their taxable supplies in the previous 12 months are below AED 187,500 or if they have ceased making taxable supplies entirely.

2. Voluntary Deregistration (Article 22)

Article 22 allows for voluntary deregistration when a business stops making taxable supplies but remains legally registered (e.g., a company temporarily ceasing business activities but not yet formally closed).

3. Authority-Initiated Deregistration (Article 23)

Per Article 23, the FTA may cancel a VAT registration if it determines that a person, company, or tax group no longer meets registration requirements. This can occur even if the taxable person has not applied for deregistration.

Required Documents for Deregistration

Valid trade license or commercial registration certificate of the company or tax group
Copy of Emirates ID and passport of the authorized signatory
Latest VAT returns (filed with the FTA)
Bank account details (for potential VAT refunds or settlements)
Final audited financial statements (if available)
Deactivation or closure certificate (if the business is being closed)
Power of attorney (if an agent is submitting on behalf of the applicant)
A statement of taxable supplies made in the last 12 months
Letter explaining the reason for deregistration
For tax groups: documentation showing group structure and any changes in group composition

Expected FTA Requests During Deregistration

Clarification of activities: The FTA may request details regarding cessation of taxable activities, including contracts, invoices, or proof of business closure.
Supporting documents: The FTA may ask for additional documents, such as recent bank statements, lease agreements, or proof of asset disposal.
Final VAT return: You will be required to submit all outstanding VAT returns up to the date of deregistration.
Settlement of liabilities: Any outstanding VAT, penalties, or administrative fines must be settled before deregistration is approved.
Refund process: If there is a refundable balance, the FTA may request additional bank information and documents to process the refund.
Review of compliance: The FTA may conduct a review or audit to ensure all VAT obligations have been met prior to confirming deregistration.

Step-by-Step Deregistration Process

Log in to the FTA e-Services portal.
Navigate to the VAT deregistration application section.
Complete the deregistration form with all required details.
Upload supporting documents as listed above.
Submit any outstanding VAT returns and settle liabilities.
Respond promptly to any FTA requests for clarification or additional documents.
Await final approval and official confirmation from the FTA.

Key Points to Remember

Applications must be made within 20 business days of becoming eligible for deregistration.
Failure to apply on time or provide required documents may result in penalties.
Tax groups must ensure all group members meet the criteria for deregistration.
Keep records of all correspondence with the FTA for your records.

For assistance with your deregistration application, or to discuss your specific situation, please contact our VAT specialists at +971 50 506 1908 or email us at info@laafzllc.com.