VAT Deregistration in UAE involves specific conditions, a structured process, and strict timelines. Businesses that miss key steps often face unnecessary fines or compliance issues. If a business has stopped making taxable supplies or its revenue falls below the threshold, it may need to apply for deregistration. But timing and documentation matter. Failing to follow the correct process can lead to a VAT deregistration penalty in UAE of up to AED 10,000.
When Should a Business Apply for VAT Deregistration?
VAT deregistration applies in two situations:
- Mandatory Deregistration
This occurs when:
- The business ceases taxable activity
- Turnover falls below AED 375,000 and is unlikely to recover within the foreseeable future
- Voluntary Deregistration
If a business was voluntarily registered and its taxable turnover drops below AED 187,500, it can apply to exit the VAT system.
The VAT deregistration time limit is clear. Businesses must apply within 20 business days of meeting the deregistration condition. Missing this deadline triggers financial penalties.
VAT Deregistration in UAE Requirements
To complete the process, the following requirements must be met:
- The business must stop taxable activities or fall below the mandatory or voluntary threshold
- All VAT returns up to the date of deregistration must be filed
- Any outstanding VAT amounts must be paid
- Necessary documents must be prepared and submitted via the FTA portal
These documents typically include:
- A cover letter with the TRN and reason for deregistration
- Proof of turnover or cessation of activity
- Final VAT return (if applicable)
- Business license cancellation document (if the business is closing)
Applications are submitted through EmiratesTax under the VAT section. Once the application is filed, the business must wait for FTA review and confirmation.
Step-by-Step Process
Step 1: Confirm Eligibility
Review current taxable turnover and business status against the thresholds.
Step 2: Prepare Documentation
Gather the financial summaries, payment proof, and license-related details.
Step 3: Submit Application
Log in to EmiratesTax and submit the deregistration request, including all required documents.
Step 4: File Final Return
Submit and pay the final VAT return within 28 days of the effective deregistration date.
Step 5: Await FTA Confirmation
FTA typically processes deregistration within 20 business days, although timelines may vary.
Avoiding the VAT Deregistration Penalty in UAE
Late applications come with consequences. The VAT deregistration penalty in UAE starts at AED 1,000 and increases by AED 1,000 each month, capped at AED 10,000. Until deregistration is approved, the business must continue filing VAT returns. Ignoring this step adds further risk.
Staying within the VAT deregistration time limit avoids these charges and clears the business from ongoing VAT responsibilities.
Tips for a Smooth Exit
| Key Area | Practical Action |
| Turnover Monitoring | Review monthly to track eligibility for deregistration |
| Timeline Alerts | Set internal reminders to apply within 20 business days |
| Return Filing | File all pending VAT returns before submitting the request |
| Document Readiness | Organize proof of revenue, TRN, and business activity status |
| Portal Checks | Monitor application status regularly on EmiratesTax |
| Record Storage | Keep deregistration certificate and records for five years |
How Elevate Accounting & Auditing Can Help
At Elevate Accounting & Auditing, we assist businesses in completing VAT deregistration efficiently and without delays or compliance issues. Our team handles:
- Eligibility checks based on up-to-date turnover and activity
- Preparation of documents aligned with VAT deregistration in UAE requirements
- Filing and submission via EmiratesTax
- Final VAT return calculations and submission
- Ongoing communication with the FTA
If you believe your business is eligible for VAT deregistration in UAE, get in touch with Elevate Accounting & Auditing. We’ll help you complete the process the right way.