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VAT Deregistration

How to Cancel VAT Registration in UAE

How to Cancel VAT Registration in UAE: Complete Guide for 2025

VAT registration in UAE is an important business management issue. In other cases, the companies are required to cancel VAT registration in case of new circumstances.

This is facilitated by the Federal Tax Authority UAE using their online portal. Learning about the deregistration process of VAT can assist you to evade punishments and remain within the compliance of the UAE VAT law.

This manual describes it all on how to cancel VAT numbers in easy steps.

What does VAT Deregistration in UAE mean?

VAT deregistration process online is the formal process of canceling your VAT registration with the Federal Tax Authority (FTA). Once deregistered:

  • You no longer charge VAT on supplies.
  • You are not obliged to file further VAT returns after the effective deregistration date.
  • But you must submit a final VAT return and settle all outstanding VAT liabilities.

Present VAT deregistration requirements will be based on your business scenario:

  • Turnover is less than the required amount in one year of operation
  • Business operations permanently cease
  • Company is restructured or merged
  • You do not make taxable supplies in UAE.

Why Companies Cancel or deregister VAT registration in UAE.

There are a number of reasons that business cancel their registration under VAT deregistration. Common reasons include:

  • Drop in turnover: If your taxable supplies in the past 12 months fall below AED 187,500.
  • Business closure: Permanent shutdown, liquidation, or cancellation of trade license.
  • Restructuring: Merging, splitting, or changing the legal structure.
  • Cessation of taxable supplies: If the company stops making taxable supplies.

The advantages of the deregistration are:

  • Reduced Administrative Workload
  • No monthly or quarterly VAT returns
  • Streamlined accounting procedures
  • Lower compliance costs
  • No VAT audits or inspections

Types of Deregistration

  1. Mandatory VAT Deregistration UAE
    Applies when:
    • You stop making taxable supplies.
    • Your taxable supplies over the last 12 months drop below AED 187,500 (the voluntary registration threshold).
    • Deadline: You must apply within 20 business days of the triggering event.
  2. Voluntary VAT deregistration UAE

Applies when:

  • Voluntary deregistration is permitted if your taxable supplies over the past 12 months are below AED 375,000, provided at least 12 months have passed since your voluntary registration, or if your business makes only zero-rated supplies with prior FTA approval.

The compliance with the VAT laws requires prompt activity in the following cases:

Full business termination  Business ownership transfer  Sole proprietor death  Liquidation process of a company

Inability to match the time frames attracts fines. VAT returns must be filed until deregistration is approved by the FTA.

FTA portal VAT deregistration UAE Step-by-Step.

The information about how to cancel VAT registration UAE will save time and avoid errors. These are the deregistration VAT processes that take you through the FTA online portal.

The FTA typically processes a complete VAT deregistration application within approximately 20 business days. In complex cases where additional documentation is required, processing may take longer.

Step-by-Step Deregistration Process (via FTA / EmaraTax)

  1. Log in to the FTA Portal
    Use your EmaraTax / FTA e-Services account to start the deregistration application.
  2. Submit the Deregistration Application
    • Select the reason for deregistration (e.g., cessation, below-threshold, restructuring).
    • Provide financial documentation: P&L, balance sheet, or trial balance.
    • Use the FTA financial turnover template (income vs. costs) if required.
    • If closing business: include license cancellation, liquidation letter, or board resolution.
    • Official letter / declaration if you expect no taxable supplies in the next 30 days (for below-threshold deregistration).
  3. FTA Review & Approval
    • The FTA estimates 20 business days to process a complete application.
    • If they need more documents, review might be extended.
    • Once approved, FTA will notify you of the effective deregistration date.
  4. File Final VAT Return
    • You must file a final VAT return for the period up to the effective deregistration date.
    • Pay any due VAT, including “deemed supplies”: you account for output VAT on business assets that you are “deemed to supply” to yourself.
    • Deadline: The final return and payment must be done within 28 days of the effective deregistration date.
  5. Receive Deregistration Certificate
    • After everything is cleared, you’ll be able to download a Deregistration Certificate from your EmaraTax dashboard.

Key Compliance Requirements & Risks

  • You must have no outstanding VAT or penalties. FTA will not deregister you unless all tax returns (including final) are filed and liabilities settled.
  • Even after deregistration, FTA can audit past periods, and you remain liable for previous errors.
  • Record-keeping: While most VAT records must be retained for 5 years, accounting records relating to capital assets should be kept for up to 10 years. For certain real estate-related assets, retention may extend to 15 years depending on FTA guidance.

FTA VAT compliance  UAE checklist:

 

Requirement Status Document Needed
All VAT returns filed ✓ Return copies
Payments cleared ✓ Bank statements
Refunds processed ✓ FTA correspondence
Records organized ✓ 5-year retention proof
Final inventory declared ✓ Stock certificates

 

Free Zone Authorities We Cover

The requirements of various locations of Free Zone Authority vary. DMCC (Dubai Multi Commodities Centre) is the trading centre which deals with precious metals and commodities. JAFZA (Jebel Ali Free Zone Authority) is in the service of logistics and manufacturing. DAFZA (Dubai Airport Free Zone Authority) concentrates on aviation companies.

In UAE, other Free Zones are: Sharjah Airport International Free Zone  Fujairah Free Zone  Ras Al Khaimah Economic Zone  Abu Dhabi Global Market.

The services of free zone company liquidation in Dubai demands coordination between FTA and zone authorities.

VAT deregistration penalties UAE & Consequences of Non-Compliance

  • Missing the 20-business-day deregistration window may result in a fine of AED 1,000 per month of delay, capped at AED 10,000. Additional penalties may apply for incorrect final VAT returns, non-submission, or failure to maintain required records.
  • Failing to submit the final return or settle dues within 28 days could delay deregistration or trigger fines.
  • Not maintaining required accounting records can lead to penalties under the tax procedures law.

Why Use a VAT Consultant  UAE for Deregistration

 

  • Helps determine whether deregistration should be voluntary or mandatory under current rules.
  • Assists in preparing and validating all required VAT deregistration documents UAE (financials, turnover template, closure letters).
  • Ensures correct accounting of “deemed supplies.”
  • Reduces risk of penalties, application rejection, or audit exposure.
  • Facilitates communication with FTA and speeds up the deregistration process.

What do you mean by VAT Deregistration in UAE? FAQ.

What is the time taken on deregistration of VAT?

The normal processing is done in 20 business days, may take longer if additional documentation is requested.

Is deregistration of VAT mandatory?

Yes, in cases where your business begins to close down permanently, or upon satisfying certain conditions in UAE VAT law.

What will follow VAT cancellation?

Even after deregistration, businesses must retain VAT records for a minimum of 5 years for audit purposes.

Revocation of VAT deregistration? How?

Once deregistration is approved and the certificate issued, the VAT registration cannot be revoked. However, if your business restarts or turnover exceeds AED 375,000, you are required to re-register. Deregistration does not remove FTA’s right to audit previous periods

Who is eligible to VAT deregistration?

Any business owners, authorized representatives or tax agents who have the proper authorization can apply.

Deregistration of VAT needs to be planned. Adherence to protocols will lead to easy cancellation of the VAT number. The FTA portal is straightforward, but careful attention to detail is essential. Remain responsible of meeting all the requirements of the UAE VAT law during the period of deregistration. Contact VAT registration UAE today to get your business deregistered for VAT.