There could be certain instances where a company needs to cancel its VAT registration. In other words, in VAT deregistration, the business drops itself from the VAT enrollment. If the reason is not genuine, FTA may also reject the VAT deregistration form.
Companies have to ensure that they have a genuine reason for VAT deregistration. If the reason is not genuine, FTA may also reject the application. The failure may lead to additional payment in the form of penalties. Therefore, you must have an efficient and knowledgeable VAT partner or tax agent who can give you the information that when it is required to deregister for VAT.
In our VAT deregistration services, we handle the complete deregistration process for them.
Mandatory VAT Deregistration
As per the FTA guidelines, there are certain conditions when one needs to unregister for VAT mandatorily.
- When your company stops dealing in taxable goods and services, you need to 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, failing which you will be liable for penalties. The penalty is AED 10,000/- if a business fails to apply for mandatory deregistration.
Voluntary VAT Deregistration
There are two situations where voluntary VAT deregistration 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.
If you had initially conducted voluntary VAT registration, you could choose to do voluntary VAT deregistration any time after the twelve months from the registration date.
There is no time limit for conducting voluntary VAT deregistration. However, to make sure successful deregistration, we advise you to take the help of expert tax agents who have prior experience of conducting deregistration.
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VAT Deregistration Process
It could appear to you that the process is facile, which is true. The main concern in the whole process is to make sure that you are eligible for VAT deregistration. If you conduct VAT deregistration without being eligible or count the annual taxable turnover incorrect, FTA may reject the application or even impose a penalty. Therefore, one must be careful while conducting VAT deregistration.
- You need to login to your VAT account present on the official FTA website.
- You will find the VAT deregistration form, which you need to fill along with mentioning the reason behind 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, your application will be analyzed by FTA before approval. They will check the reason you provided for VAT deregistration. They will also go through the status of returns, pending tax payments, and check if there are any unpaid penalties.
FTA will only provide the approval if they find the reason for VAT deregistration suitable. Further, you must have cleared the entire outstanding tax amount, and returns have been filed.
VAT Deregistration for Groups
The rules and processes of the group VAT deregistration are the same as they are for individual companies. However, the circumstances are a bit different.
In addition to the other criteria for VAT deregistration, the tax group must have the following reasons to deregister:
- The registered entity does not meet requirements to be considered as a group
- The registered entity is no more financially associated with the group
- FTA may, of its own, initiate the deregistration if it feels the registration gives rise to any type of tax evasion
VAT Deregistration Could Be Complex- Get Professional Help to Avoid Errors
Sit back and relax- N R Doshi and Partners is there to handle the entire VAT deregistration process for you
Why Choose N R Doshi and Partners’ VAT Deregistration Services ?
We have experience in conducting VAT deregistration as well as VAT registration for many businesses.
Besides this, we even perform VAT accounting and return filing for businesses from various industries. The companies associated with us have obtained a high level of satisfaction, which we wish to deliver to all our potential clients. N R Doshi and Partners also provides services related to core business processes such as auditing and accounting.
- We have tax consultants all across the UAE, which are ready to provide you with VAT deregistration service anytime you require. We will make sure to complete the deregistration task before the deadline.
- We even provide VAT accounting service and return filing. If you wish to have a VAT partner who can take care of all your VAT-related requirements, we are the one.
What will happen if a business fails to submit the VAT deregistration application before the deadline?
Businesses have to file for VAT deregistration in twenty days of becoming qualified for deregistration, failing which FTA will impose a penalty on the company. The amount of penalty is AED 10,000.
My taxable supplies are worth AED 1,50,000 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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