Mandatory VAT Deregistration
In line with the FTA guidelines, entities must fulfill certain conditions during VAT deregistration.
- When a company stops dealing in taxable goods and services, it must deregister for VAT.
- When the annual turnover of the taxable supplies or expenses of the past twelve months becomes lower than the VAT registration threshold- AED 187,500, you need to deregister without option.
You have a time limit of 20 business days to apply for VAT deregistration in UAE, failing which you will be liable for penalties. The penalty is AED 10,000/- if a business fails to apply for mandatory VAT deregistration in UAE.
Voluntary VAT Deregistration in UAE
There are two situations where voluntary VAT deregistration in UAE can take place. If your annual turnover for the last twelve months goes below AED 375,000, you can perform voluntary VAT deregistration. However, please note that if it goes below AED 187,500, it is compulsory.
Suppose you had initially conducted voluntary VAT registration. In that case, you could choose to do voluntary VAT deregistration any time after twelve months from the registration date.
There is no time limit for conducting voluntary VAT deregistration in UAE. You need to entrust the services of experienced & qualified tax agents with proven track records to ensure successful deregistration.
Process of VAT Deregistration in the UAE
VAT Deregistration in the UAE is simple, but you must get the basics right. Are you sure that your business is eligible for VAT deregistration in UAE?
Suppose you conduct VAT deregistration without eligibility or miscount the annual taxable turnover. In that case, FTA may reject the application or even impose a penalty. Therefore, one must be careful while conducting VAT deregistration in UAE. The deregistration process is as follows:
- Log in to your VAT account on the FTA’s official website.
- Fill in the VAT deregistration form. Do not forget to mention the reason for the cancellation.
- Click on the submit option. You will receive a message on the registered mobile number for verification purposes.
After you submit the form, the FTA will review your application. They will then check the reason you provided for VAT deregistration in UAE. They will also review the status of VAT Return Filing and pending tax payments while checking if there are any unpaid penalties.
Further, FTA will only approve the deregistration if they find the reason suitable. Furthermore, you should have cleared the entire outstanding tax amount and filed returns.
VAT Deregistration for Groups
The rules and processes of the group VAT deregistration in the UAE are the same for individual companies. However, the circumstances are a bit different.
The group VAT deregistration process is slightly different from the conventional VAT registration. Entities in the UAE must meet the criteria below-
- The registered entity does not meet the requirements to be considered a group.
- The registered entity is no longer financially associated with the group.
FTA may, on its own, initiate deregistration if it feels the registration gives rise to any tax evasion.
Why Choose N R Doshi and Partners’ VAT Deregistration Services in UAE?
Why Choose N R Doshi and Partners’ VAT Deregistration Services in UAE?We have experience conducting VAT deregistration in the UAE and VAT registration for many businesses.
Besides this, we also perform VAT accounting and return filing for businesses from various industries. We provide practical, cost-effective, and tailor-made financial services to our clients. Their long-term association with us is proof of our abilities. N R Doshi and Partners also provides services related to core business processes such as auditing and accounting.
Our Strength
- Firstly, we have tax consultants across the UAE. They can provide you with prompt & professional VAT deregistration services. We will ensure the completion of the deregistration process way before the deadline.
- Secondly, we also provide VAT accounting services and return filing. We are ready to serve you if you need a VAT partner who can take care of all your VAT-related requirements
FAQs
What will happen if a business fails to submit the VAT deregistration application before the deadline?
Businesses must file for VAT deregistration within 20 days (about 3 weeks) of qualifying. If they fail to abide by this rule, the FTA may impose a hefty penalty of AED 10,000 for the offense.
2) My taxable supplies are worth AED 150,000 during the last 12 months, but taxable expenses are more than AED 1,87,500. Should I apply for VAT deregistration?
Considering the facts, in your case, it is not mandatory for you to apply for deregistration.
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