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A Comprehensive Guide to VAT Deregistration UAE: Steps and Eligibility

When a business wants to stop participating in VAT in the UAE, its TRN (Tax Registration Number) gets canceled. This happens through a process called VAT deregistration. To do this, a business must tell the Federal Tax Authority (FTA) that they want to cancel their VAT registration. But there are rules – the government decides when you can leave and why. The FTA also determines if you can leave or not.

People leave the VAT system for different reasons, but these reasons have to match the government’s rules. The government sets the rules like guidelines for the VAT club. If your reason matches, you can ask to leave. There’s a specific time when you can leave without getting into trouble. It’s important to follow this time to avoid extra fees or problems.

Knowing the VAT laws is important. It’s like understanding the rules of a game before you play. To leave VAT correctly, you need to know the current VAT laws in the UAE. This helps you do everything right and on time. Leaving VAT is a bit like solving a puzzle. You need to tell the FTA, follow the rules, and know when to do it. So, whether you’re saying goodbye to VAT for a while or forever, you know how to do it correctly.

Today, we’re unraveling the intricacies of a critical aspect of the UAE’s tax landscape – VAT deregistration. While it might sound complex, we’re here to demystify the process and guide you through each step. Think of this as your roadmap to understanding how businesses can bid farewell to their VAT registration in the UAE.

Understanding VAT Deregistration UAE

To kick things off, let’s clarify what VAT deregistration UAE entails. In the UAE, the termination of a Tax Registration Number (TRN) is the outcome of VAT deregistration or cancellation. When businesses decide to step out of the VAT circle, they must formally cancel their registration with the Federal Tax Authority (FTA). However, this decision isn’t arbitrary; it must align with specific conditions outlined in the UAE’s VAT regulations. The FTA has the authority to accept or reject VAT deregistration applications.

The Importance of VAT Deregistration UAE

VAT deregistration in the UAE is as pivotal as the initial registration process. Any VAT-registered entity should be well-versed in the prevailing VAT legislation to ensure a smooth application for VAT cancellation. Furthermore, there’s a designated timeframe for a business to opt for deregistration without incurring penalties.

Eligibility for VAT Deregistration

Now, let’s delve into the eligibility criteria for VAT deregistration UAE, as per the current regulations set by the Federal Tax Authority:

1. Mandatory VAT Deregistration: A business can qualify for mandatory VAT deregistration if:

  • It ceases to engage in taxable supplies, or
  • The total value of taxable supplies for the past year and the upcoming thirty days doesn’t surpass the threshold for voluntary VAT registration.

   If your business meets these conditions, applying for VAT deregistration is essential to avoid fines and penalties promptly.

2. Time Limit for Mandatory Deregistration Application: Once your business becomes eligible for VAT deregistration, it must apply within twenty business days from the triggering event. Failure to adhere to this timeline can result in financial penalties.

Voluntary VAT Deregistration

Voluntary VAT deregistration UAE is also a possibility if your business falls under the following scenarios:

  • It has dealt with taxable supplies over the last twelve months, but its taxable supplies are below the mandatory VAT registration threshold (currently Dh375,000).
  • Twelve calendar months have passed since your business registered for voluntary VAT.

In these cases, you can apply for voluntary VAT deregistration without a specific deadline imposed by the Federal Tax Authority.

The VAT Deregistration Process

Once your business has valid reasons for VAT deregistration, it’s time to initiate the process by providing the necessary information to the tax authority. Alongside the application, clearances for outstanding taxes, fines, or administrative penalties must be included, along with proof of filed returns. Any outstanding penalties and liabilities must also be settled if your business fails to apply within the required timeframe.

VAT Deregistration Penalty

Remember that a penalty of Dh10,000 applies if a mandatory VAT deregistration application is not submitted within the stipulated deadline.

After Application Submission

You’ll receive a confirmation notification from the FTA after submitting your VAT deregistration UAE application and supporting documentation. Subsequently, the FTA will review the application’s reasons, highlighting the importance of providing proof and evidence. Factors such as pending penalties, return statuses, and tax payments will also undergo scrutiny.


Congratulations, you’ve been guided through the VAT deregistration UAE process! Understanding the eligibility criteria and adhering to the proper steps are crucial. If you ever find your business in a position where VAT deregistration makes sense, follow this comprehensive guide to navigate the process confidently. Here’s to smooth sailing on your journey through the UAE’s VAT landscape!