How to Deregister VAT in UAE: Process, Requirements & FAQs

VAT deregistration in the UAE is an administrative process governed by the Federal Tax Authority (FTA) and applies where a company stops taxable activities or no longer qualifies for mandatory or voluntary registration thresholds. Companies are required to apply for VAT deregistration in advance to avoid administrative fines.

The deregistration process is conducted through the EmaraTax portal, beginning with the submission of a deregistration request. Businesses must update bank details, submit supporting documents, specify eligibility and effective dates, and confirm signatory information. A final VAT return must be filed upon approval, and all liabilities or penalties must be cleared. 

What is VAT Deregistration in the UAE?

FTA VAT deregistration process is the official process of cancelling a business VAT registration with the Federal Tax Authority (FTA) since it is no longer entitled to be registered. It is a statutory process that has to be executed within the timeframe to be compliant with the UAE VAT Law.

Why Deregister from VAT

Eligibility to be considered for VAT deregistration in the UAE is clearly under the Federal Decree-Law and must be determined on the basis of recent trading. The application must be submitted within 20 working days of becoming eligible, according to FTA guidelines. The following conditions determine who can submit an application:

• The business has ceased making taxable supplies completely.
• Within 12 months, the amount of taxable supplies drops below the voluntary VAT registration level of AED 187,500.
• The company deregisters voluntarily although it makes taxable supplies above AED 187,500, but not to or above the compulsory threshold of AED 375,000.
• A shift in business activity or corporate form renders VAT registration outdated.
• The company is being wound up, shutting down, or legally wound up.

Step-by-Step Process to Deregister VAT in UAE

Businesses must complete the VAT deregistration process accurately and within the statutory deadline to avoid penalties or legal complications. Below are the step by step guide on  how to successfully deregister for VAT in the UAE:

1. Log in to EmaraTax using your credentials or UAE PASS.
2. Select your company (Taxable Person) from the dashboard.
3. On the VAT tile, click “Actions” and choose “Deregister.”
4. Update bank account details if needed, then click “Proceed to De-Registration.”
5. Deregister from the Tourist Refund Scheme (TRS) if your company is registered under it.
6. Fill in the deregistration application form with accurate details.
7. Upload supporting documents like financial reports, VAT returns, and proof of stopped taxable activities.
8. Choose the reason for deregistration (e.g. business closed, revenue below threshold).
9. Download and complete the taxable supplies/expenses Excel sheet if required, then upload it.
10. Enter the eligibility date for deregistration.
11. EmaraTax auto-fills the effective deregistration date; edit it with justification if needed.
12. Review and confirm the authorised signatory details.
13. Click “Next Step” to proceed.
14. Review the entire application and verify all entries.
15. Accept the declaration terms and submit the application.
16. Wait for FTA review. Respond to email requests for any additional documents.
17. Be prepared for a possible tax audit during FTA’s review.
18. After approval, file the final VAT return for the period ending on the deregistration date.
19. Pay all outstanding VAT dues, penalties, or adjustments to the FTA.
20. If your account has excess credit, apply for a refund via EmaraTax

Timelines and Compliance Notes

• The FTA typically takes 20 business days to process a fully completed VAT deregistration application.
• Applications must be submitted within 20 business days from the date your business becomes eligible for deregistration, as per Article 21 of the UAE VAT Law.
• Failure to submit the application within the 20-day window will result in a penalty of AED 1,000, with an additional AED 1,000 per month of delay, capped at AED 10,000.

Post VAT Deregistration Process in UAE

The post-deregistration phase is crucial to ensure full compliance with FTA requirements and to formally conclude your VAT obligations.

• Once the VAT deregistration application is submitted via the EmaraTax portal, a unique reference number is generated. This reference number must be noted for all future correspondence with the FTA.
• Upon review of the submitted application, the FTA may either pre-approve or reject the request. In many cases, additional supporting documents may be requested to validate the reason for deregistration. It is important to monitor your application status regularly through the EmaraTax dashboard.
• If the deregistration is approved, you will receive both an email and an SMS notification. The system will then prompt you to file your final VAT return, as auto-generated by EmaraTax. 
• Deregistration will not be completed until all outstanding tax liabilities, administrative penalties, and pending VAT returns are settled.
• If your account is in credit, a refund must be initiated through the EmaraTax portal. Additionally, applicants are advised to review the "What Next" and "Important Notes" sections to ensure all steps are completed in accordance with FTA requirements.

Documents Required for VAT Deregistration in UAE

To complete the VAT deregistration process, the following documents must be submitted along with the application:

• Cancelled trade licence copy, liquidation letter, and board resolution
• Latest financial statements, including Trial Balance, Profit & Loss account, or Balance Sheet (audited or unaudited)
• A letter from the Ministry of Labour confirming the number of employees
• Old and revised sales contracts or trade licences
• Amended company setup contract (if applicable)
• Financial turnover template showing taxable income and expenses since the date of VAT registration
• Proof of cessation of business activity (if applicable)
• A visual chart of business operations, including suppliers and importers
• Official letter (signed and sealed) declaring the absence of any business activity within the UAE, if required
• Geographical chart showing supplier and customer locations
• Sample invoices
• Duplicate Tax Registration Number (TRN) certificate
• Official letter mentioning the TRN used
• TRN certificate for the business’s head office

Benefits of VAT Deregistration in the UAE

Applying for VAT deregistration is a legal requirement. However, beyond compliance, deregistration from VAT offers several practical advantages:

• 1. Compliance Relief:  Ends the obligation to submit VAT returns, maintain VAT records, and undergo VAT audits.
• 2. Cost Reduction:  Eliminates expenses related to VAT consultancy, accounting tools, and periodic filings.
• 3. Penalty Avoidance:  Prevents fines for failure to deregister within the 20-business-day deadline after becoming ineligible.
• 4. Better Cash Flow:  Removes the need to charge VAT on sales or manage input VAT claims, simplifying financial operations.
• 5. Legal Compliance:  Ensures alignment with FTA regulations, reducing the risk of regulatory issues.
• 6. Easier Business Closure:  Streamlines the tax and legal procedures involved in shutting down or restructuring the company.
• 7. Clean Tax Record:  Helps maintain a good compliance history, useful for future ventures, financing, or audits.

Conclusion

VAT deregistration in the UAE is required when a business stops taxable activities, is being closed or liquidated, or its taxable turnover drops below the mandatory AED 375,000 registration thresholds. The application must be submitted through the EmaraTax portal within 20 business days of becoming eligible, with all required documents and final VAT returns filed.

Deregistration is necessary to comply with UAE VAT law, avoid penalties, and officially end VAT obligations. It ensures the business is no longer required to submit VAT returns or maintain VAT records, allowing for proper closure or restructuring.