If your business is no longer required to be registered for value added tax (VAT) in the United Arab Emirates (UAE), you must apply for deregistration with the Federal Tax Authority (FTA).
Closing your business or cancelling your trade licence does not automatically end your VAT registration. You will need to submit an application through EmaraTax and complete any outstanding VAT obligations before the process can be finalised.
Our team at Hawksford can help you assess your business’ deregistration requirements and manage the application process through EmaraTax. We can also assist with your final VAT obligations to help ensure the process is completed correctly.
When must a business deregister for VAT in the UAE?
Mandatory VAT deregistration
Your business must apply for VAT deregistration with the FTA in either of the following circumstances:
- Your business ceases activities that require VAT registration, such as when it permanently closes and does not expect to resume taxable supplies.
- Your taxable supplies and taxable expenses fall below the voluntary registration threshold of AED 187,500 over the preceding 12 months, and you do not expect taxable supplies or taxable expenses to exceed that threshold within the next 30 days. This is subject to the applicable statutory conditions.
You should review your VAT registration position when winding down operations rather than waiting until your trade licence has been cancelled.
Voluntary VAT deregistration
You may also apply for voluntary deregistration if your taxable supplies over the previous 12 months are below AED 375,000 but remain at or above AED 187,500, subject to the applicable conditions.
If your business originally registered for VAT voluntarily, you cannot apply for voluntary deregistration within the first 12 months of registration.
VAT deregistration deadlines in the UAE
For mandatory VAT deregistration, the application deadline is 20 business days from the date the obligation arises.
For voluntary VAT deregistration, there is no equivalent mandatory application deadline. You can apply once your business meets the relevant eligibility conditions.
In both cases, the FTA can take around 30 business days to process your completed application. Processing may take longer if additional information is required.
You must also file your final VAT return and settle any VAT payable within 28 days of the effective deregistration date, regardless of whether your deregistration is mandatory or voluntary. This date is determined by the FTA and may be earlier than the date your application is approved.
Documents required for VAT deregistration
The documents you need for VAT deregistration depend on why your business is applying. The FTA requires supporting evidence to confirm that your business meets the relevant deregistration conditions.
The table below outlines the supporting documents you may need, depending on your reason for deregistration.
| Reason for deregistration | Supporting documents |
| Business closure or trade licence cancellation | Trade licence cancellation certificate, liquidation letter or board resolution confirming the closure, together with the FTA's financial turnover template |
| Sale of a sole establishment's trade licence | Sale agreement, amended trade licence and financial turnover template |
| Taxable supplies fall below AED 187,500 | Financial turnover template showing taxable supplies and expenses, along with a signed company declaration confirming that the business will not exceed the applicable VAT registration threshold within the next 30 days |
| Voluntary deregistration where taxable supplies are between AED 187,500 and AED 375,000 | Financial turnover template and a signed company declaration confirming that the business will not exceed the mandatory VAT registration threshold within the next 30 days |
| Business makes only exempt or out-of-scope supplies |
Supporting information showing the nature of the business activities and where transactions take place.
Depending on the circumstances, the FTA may require a financial turnover template, a signed declaration and sample invoices.
|
Documentary requirements may vary depending on the circumstances of the application and the FTA's prevailing requirements. Additional information or supporting evidence may be requested during the review process.
Depending on your business structure and the reason for deregistration, the FTA may request additional supporting documents, including declarations for sole establishments or financial turnover information covering the period since your original VAT registration.
Before submitting your application, make sure your financial records support the reason for deregistration and are consistent with your previously filed VAT returns.
How to deregister for VAT in the UAE
1. Confirm whether deregistration is mandatory or voluntary
Review your taxable supplies over the previous 12 months, your expected supplies over the next 30 days and any taxable expenses relevant to your eligibility.
These figures will help you determine whether your business must deregister or can apply voluntarily.
2. Identify the relevant deregistration date
Identify when your business became required or eligible to deregister. This may be when you stopped making taxable supplies or when your taxable turnover met the relevant conditions.
When submitting your application, you will need to provide the relevant dates and supporting information. The FTA will review your application and determine the effective deregistration date.
3. Prepare the supporting documents
Gather the documents relevant to your deregistration application, as outlined above. Before uploading them, check that the information is consistent with your accounting records and previously filed VAT returns.
4. Submit the application through EmaraTax
The application can generally be submitted through EmaraTax using the following steps, subject to any updates to the FTA's online process.
- Log in to your EmaraTax account
- Select View to access your Taxable Person Account
- Under VAT, click Actions and select De-Register
- Enter your reason for deregistration, the relevant dates and other required information
- Upload the supporting documents and submit your application
The FTA does not charge a fee for VAT deregistration applications.
What happens after submitting a VAT deregistration application?
Once you submit your application through EmaraTax, the FTA will review your information and supporting documents. If additional information is required, the FTA will request it through the application process.
Following its review, the FTA will confirm the effective deregistration date, which determines when your final VAT reporting period ends.
You must complete your final VAT return and settle any outstanding tax liabilities and administrative penalties. Your final return may also need to account for VAT on remaining assets and inventory where input VAT was previously recovered.
Once you have completed your outstanding VAT obligations and the FTA has finalised your deregistration, you can download your deregistration certificate from EmaraTax as confirmation.
Recordkeeping obligations continue after VAT deregistration. VAT records must generally be retained for at least five years after the end of the relevant tax period, while records relating to real estate are generally subject to a 15-year retention period, subject to applicable legal requirements and extensions.
VAT deregistration penalties and tax implications
If you miss the mandatory VAT deregistration deadline, a penalty of AED 1,000 applies, with a further AED 1,000 imposed monthly, up to a maximum of AED 10,000. Separate penalties may also apply if you submit VAT returns late or fail to pay the tax due.
Deregistration may also affect VAT previously recovered on business purchases. If your business still holds inventory, equipment or other assets on the effective deregistration date, these may be treated as deemed supplies where input VAT was previously recovered. This means you may need to account for output VAT even though the assets have not been sold.
Qualifying capital assets that remain within the relevant adjustment period may also require adjustments under the Capital Assets Scheme. However, exceptions to the deemed-supply rules may apply where the recovered input VAT has already been adjusted under the scheme.
If your business has an outstanding VAT credit balance, you should reconcile it with the FTA and determine whether you are eligible to request a refund through EmaraTax.
VAT deregistration for UAE tax groups
Businesses registered as a VAT tax group must follow a separate deregistration process. Under UAE VAT rules, companies within an approved tax group are treated as a single taxable person and generally file VAT returns under one Tax Registration Number (TRN).
If your tax group no longer meets the eligibility requirements or its members decide to dissolve the group, the representative member must submit a deregistration application through EmaraTax.
The supporting documents depend on the reason for deregistration. If the group no longer meets the eligibility requirements, you must provide evidence of this. For voluntary dissolution, you need a signed letter confirming the group's decision. In either case, the FTA requires separate turnover declarations for each member and the representative member, covering the relevant tax periods since the group's registration.
Removing one company from a VAT group does not necessarily require deregistering the entire group. If a member ceases trading or no longer qualifies for group membership, the representative member can apply for its removal through the Tax Group Record Amendment service.
When a member leaves the group or the entire group is dissolved, you should review the individual VAT registration requirements of each affected company. Depending on the circumstances, the FTA may issue a new TRN or reactivate a previous registration. VAT adjustments may also arise from changes in group membership.
How we can help with VAT deregistration in the UAE
Our Hawksford team has FTA-approved Tax Agents who can be formally appointed to represent your business before the authority.
If your business is closing or undergoing a reorganisation, we can assess whether VAT deregistration is required and determine the relevant application dates. We can also review your VAT records to identify outstanding liabilities and any adjustments required for remaining business assets.
Our UAE team can manage the EmaraTax application on your behalf and assist with your final VAT return, including responding to queries from the FTA.
Beyond deregistration, we support businesses throughout the VAT lifecycle, from assessing registration requirements and monitoring taxable turnover to managing VAT registration and tax group applications. We can also assist with voluntary disclosures and e-invoicing readiness.
Get in touch with our UAE tax team to discuss your requirements. You can also explore our UAE tax and accounting guide for guidance on other business requirements.
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