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VAT De-registration

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Overview of VAT De-registration

De-registering your Tax Registration Number (TRN) is as important a registering for VAT. The Federal Tax Authority (FTA) has made it mandatory to de-register for VAT if the business meets certain criteria.

Administrative penalties have been imposed if the de-registration procedure isn’t carried out or has been delayed.

When to De-register for VAT?

A taxable person can be deregistered under 2 factors:

Mandatory De-registration

Conditions:

  • The business has stopped making taxable supplies; OR
  • If the turnover did not exceed AED 187,500 in the 12 months after registering with the FTA.

Timeframe to avoid penalty:

  • 20 working days within the period any of above conditions are triggered.


Voluntary De-registration

Conditions:

  • The business has not made supplies or expenses above the threshold of AED 375,000 in the past 12 calendar months; OR
  • 12 calendar months have passed since the entity was registered with FTA under voluntary registration.

Time Frame to avoid penalty:

  • Since this is a voluntary deregistration, there is no time-frame involved.


Things to do before De-registering

Submit final VAT Return

Clear all outstanding liabilities

Make sure condition to de-register is satisfied

Timely de-registration to avoid penalty

How much is the penalty?

The penalty for late mandatory de-registration of VAT is AED 10,000.

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