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.  

Check: What all businesses are included in tax

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 Deregistration is nothing but a business can be withdrawn from paying taxes either voluntarily or mandatorily.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.

Voluntary Deregistration

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.

Check: Start saving on VAT with these 10 best tips given by financial advisor 

Mandatory Deregistration

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.  

Also Read: Tax on fizzy drinks and tobacco products 

A person who wants to deregister can visit the nearby FTA office, fill the application form and follow the instructions given by the authorities. 

Meet the author
Nikhita
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Nikitha is a Senior Analyst at MyMoneySouq.com. She has been writing about personal finance, credit cards, mortgage, and other personal finance products in the UAE. Her work on Mortgage loans has been featured by the GulfNews and other popular Financial Blogs in the UAE.

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