After the successful registrations of the entities for VAT, FTA(Federal Tax Authority) has closed the registration lines recently. More than 90% of the companies registered for VAT which comprises about 80% of SMEs. Even now entrepreneurs can register their companies if not done yet but would be charged some additional fees for the late registration.
As per a recent update from FTA, organizations can be deregistered from the VAT. Deregistration is nothing but a business can be withdrawn from paying taxes either voluntarily or mandatorily. Deregistration can be done only after the approval of the FTA after the application for the deregistration is submitted to the respective authority. The authority of tax deregistration will check with the deregistration application and cancels the VAT number provided to the entity.
A company can withdraw itself from paying and levying taxes voluntarily on few cases like
- If the company no longer supplies the goods which are taxable
- If the company annual turnover is below AED 375,000 even after supplying taxable goods.
- If the company is been closed permanently
In certain cases, the FTA approves the deregistration application if the reason for canceling the VAT number is valid. The authorities will check with the reason and approves the application.
There can be times where the tax authorities tend to cancel your business registration which will be mandatory on an official notice. If the related authorities find that the organization no longer is making revenue of AED 375,000 or if the company doesn’t supply any taxable goods then the company needs to be deregistered from paying taxes.
After the approval of the deregistration number the authorities will cancel the VAT number provided on registration and if any company wishes to register once again have a fill the registration form once again and a new VAT number will be provided.
Transfer of a VAT number
If an entity is transferred to a new owner i.e if the business is been sold, then the VAT number also should be transferred under the name of the new applicant. Rather than transferring the business, it is better to unregister and then register on a new name.
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