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VAT Deregistration in the UAE
VAT deregistration is the process of cancelling your VAT registration with the Federal Tax Authority (FTA).
It’s required when your business no longer meets the criteria for VAT registration — for example, if your turnover falls below the deregistration threshold or you’ve stopped trading altogether.
This guide explains when you must deregister, how to apply, what documents are required, and the penalties for late deregistration.
When to Deregister from VAT in the UAE
You can apply for VAT deregistration voluntarily or mandatorily, depending on your circumstances.
Mandatory Deregistration
You must deregister if:
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Your business ceases making taxable supplies (for example, you’ve closed or sold the business), or
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You are no longer conducting business activities that require VAT registration.
FTA deadline:
Apply for deregistration within 20 business days from the date you stop making taxable supplies.
Failing to apply within this period can lead to administrative penalties.
Voluntary Deregistration
You may apply for voluntary deregistration if:
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Your taxable turnover over the past 12 months has fallen below AED 187,500 (the voluntary registration threshold), and
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You do not expect to exceed that threshold in the coming 30 days.
If your turnover simply drops below AED 375,000 (the mandatory threshold) but stays above AED 187,500, you cannot deregister yet — you must wait until it falls below the lower limit.
Conditions Before Applying for Deregistration
Before submitting your deregistration request, make sure:
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All VAT returns are filed up to the deregistration date.
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All outstanding VAT payments and penalties are cleared.
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You have no pending refund claims or adjustments.
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Your final VAT return includes all due output VAT and input VAT adjustments (such as stock or assets held).
If these steps aren’t completed, the FTA will reject or delay your application.
How to Apply for VAT Deregistration
You can apply for VAT deregistration through the FTA e-Services Portal.
Step-by-Step Guide:
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Log in to your FTA account.
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Select your Taxable Person profile.
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Click on VAT Deregistration under the “VAT” tab.
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Choose the reason for deregistration (ceased trading, turnover below threshold, etc.).
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Enter the effective date of deregistration (the date you stopped taxable activity).
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Review, confirm, and submit your application.
Once submitted, the FTA will review your request and typically respond within 20 business days.
Documents You May Need to Provide
During the deregistration process, the FTA may request:
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Latest bank statements showing reduced turnover or ceased activity
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Final VAT return confirmation
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Trade licence cancellation certificate (if closing down)
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Audited financial statements or management accounts
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Explanation letter for voluntary deregistration
Providing clear supporting documents helps prevent delays.
Final VAT return
Before your deregistration is approved, you’ll need to submit a final VAT return covering the period from your last return up to the effective deregistration date.
You must:
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Include all outstanding output VAT (e.g. on final sales or assets held for business use)
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Adjust for any input VAT previously claimed on goods or services no longer used for taxable activities
Example:
If you still hold stock worth AED 50,000 when you deregister, you may need to pay VAT on the deemed value of that stock
FTA Review and Approval Process
After submission, the FTA will:
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Review your application and supporting documents.
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Verify that all tax liabilities are cleared.
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Confirm your eligibility.
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Issue an approval notification via your FTA account and registered email.
Once approved, your Tax Registration Number (TRN) will be deactivated.
Deregistration Penalties
Failing to apply for deregistration within the FTA’s required timeframe can result in penalties.
| Violation | FTA Penalty (AED) |
|---|---|
| Failure to apply for deregistration within 20 business days | 10,000 |
| Failure to file final VAT return or settle dues | Variable (based on unpaid VAT) |
| Providing incomplete or incorrect information | 5,000 per instance |
Even after deregistration, if the FTA finds unpaid VAT liabilities, they can still pursue collection.
After Deregistration — What to Expect
Once deregistered:
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You will no longer charge or collect VAT.
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You must stop issuing tax invoices and remove your TRN from invoices, websites, and marketing materials.
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You should keep all VAT records for at least 5 years after deregistration (15 years for real estate).
If your turnover increases again in the future, you can reapply for VAT registration via the same FTA portal.
What This Means for Your Business
VAT deregistration isn’t just a formality — it’s a compliance process that requires care and timing.
To avoid FTA penalties and delays:
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Monitor your turnover regularly.
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Apply promptly once eligible.
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Ensure final returns and payments are completed before submission.
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Keep evidence of reduced business activity ready for FTA review.
More Than Accountants can handle the entire deregistration process for UAE businesses — ensuring accurate final VAT returns, supporting documentation, and full FTA compliance.
