VAT Deregistration in UAE: Complete Guide for Businesses

Value Added Tax (VAT) has been part of the UAE’s tax landscape since 2018. While registering for VAT is mandatory for qualifying businesses, there are situations where a business may need to deregister from VAT. This process, known as VAT deregistration in UAE, is governed by clear criteria, laws, and documentation requirements.

In this blog, we’ll explore everything you need to know about VAT deregistration—requirements, criteria, documents, law, and the time limits you must follow.

What is VAT Deregistration?

VAT deregistration is the formal process of canceling your VAT registration with the Federal Tax Authority (FTA) in the UAE. This becomes necessary when a business no longer meets the conditions that require VAT registration.

VAT Deregistration Criteria

According to the VAT deregistration law, a business must apply for VAT deregistration if:

• The value of taxable supplies in the last 12 months is less than AED 187,500, or
• The business has ceased making taxable supplies permanently.

You may also voluntarily apply for deregistration if:

• Your taxable supplies fall below the mandatory threshold (AED 375,000) but are still above the voluntary threshold (AED 187,500).

In all cases, the business must be able to prove that it meets the VAT deregistration criteria through financial records.

VAT Deregistration Requirements in UAE

To deregister for VAT in the UAE, you must meet the following VAT deregistration requirements:

1. Submit a VAT deregistration application via the FTA portal.
2. Ensure all VAT returns are submitted up to the deregistration date.
3. Pay all outstanding VAT liabilities and penalties.
4. Provide accurate financial data showing the drop in taxable supplies.
5. Close your VAT account only after FTA approval.

VAT Deregistration Documents

The FTA may request the following VAT deregistration documents to support your application:

• Trade license copy
• Emirates ID & passport copies of business owner(s)
• Financial statements or sales records for the past 12 months
• VAT return summaries
• Proof of business closure (if applicable)
• Clearance of VAT liabilities
• Bank account details

All documents must be submitted in accordance with FTA guidelines to avoid rejection or delays.

VAT Deregistration Law in UAE

The Federal Decree-Law No. 8 of 2017 on Value Added Tax and Cabinet Decision No. 52 of 2017 outline the conditions under which deregistration is required. Under this VAT deregistration law, failure to apply within the stipulated time can result in administrative penalties.

VAT Deregistration Time Limit

The VAT deregistration time limit is 20 business days from the date the business becomes eligible for deregistration.

Missing this deadline can result in a penalty of AED 1,000, which may increase for repeated delays.

🚫 What Happens if Your Trade License is Expired During VAT Deregistration?

If your trade license is expired, the Federal Tax Authority (FTA) may reject or delay your VAT deregistration application. That’s because a valid trade license is a key requirement for any tax-related process in the UAE, including deregistration.

What You Should Do:

1. Renew Your Trade License First
   Before applying for VAT deregistration, renew your trade license with the relevant authority (e.g., DED, free zone, etc.). This shows that your business is still active and operating legally—or gives a clear date of closure if you’re winding down.
2. Submit the Renewed License
   Upload the renewed trade license copy with your VAT deregistration documents on the FTA portal.
3. If Business is Closed
   If you’re permanently shutting down, you’ll need to:
   • Attach proof of closure (final liquidation letter, cancellation certificate, etc.).
   • Settle all VAT dues before deregistration.

Final Thoughts

Understanding the VAT deregistration requirements in UAE is essential to avoid unnecessary penalties and remain compliant with local tax laws. Whether you’re closing your business or no longer meet the registration threshold, make sure you understand the VAT deregistration criteria, submit the correct documents, and apply within the time limit outlined by VAT deregistration law. Need help with VAT deregistration? Our team of Beyond view UAE tax consultants can assist you with documentation, application, and liaising with the FTA for a smooth deregistration process

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