Not every business needs to stay VAT-registered forever. If your turnover has dropped below AED 375,000 or operations are winding down, it might be time to deregister and doing it right can save you time, money, and FTA penalties.

In this article, we’ll walk you through when and how to deregister for VAT in the UAE, including eligibility, required documents, and the step-by-step process on the EmaraTax portal.

What Is VAT Deregistration?

VAT deregistration is the formal procedure through which a business is removed from the VAT (Value Added Tax) system with the relevant tax authority in the UAE, the Federal Tax Authority (FTA). This process means the business is no longer obligated to charge VAT on its goods or services and is relieved of the responsibilities that come with being VAT-registered.

The deregistration process takes place using the FTA portal.

When to Deregister from VAT in the UAE

Deregistration is mandatory if:

  • The business ceases to make taxable supplies.
  • The value of taxable supplies made in the preceding 12 months is less than AED 187,500.
  • There is two or more TRNs registered for the same entity.
  • Trade license is cancelled by the relevant authorities.

Deregistration can be done voluntarily if:

  • The value of taxable supplies falls below the mandatory threshold; and
  • Twelve months have passed since the date of registration.

Deregistration may be required during the following instances (based on company  and FTA discretion):

  • Business Restructuring (Change in business structure, ownership or legal entity).
  • Transfer of substantial assets of the business (including goodwill).
  • Planning to enter a VAT group.

How to Apply for VAT Deregistration

Follow these steps to successfully complete your VAT deregistration through the FTA EmaraTax portal:

Step 1: Confirm Your Eligibility

Before starting the process, make sure your business qualifies for VAT deregistration. Common reasons include closing down your business, your turnover dropping below the required threshold, or significant changes in your business structure.

Step 2: Prepare the Required Documents

The documents you need to upload will depend on why your business is applying for VAT deregistration.

-If your business has stopped making taxable supplies

  • Proof that taxable supplies have ceased — such as a trade license cancellation, liquidation letter, or board resolution
  • A financial document (e.g., trial balance, profit & loss statement, or balance sheet)
  • A Declaration confirming that your business does not expect to make taxable supplies within the next 12 months

-If your business is still making taxable supplies but below the voluntary registration threshold

  • A financial document (trial balance, P&L statement, or balance sheet)
  • A Declaration confirming that turnover is not expected to exceed the voluntary registration threshold

-If your business turnover is above the voluntary threshold but below the mandatory threshold

  • A financial document (trial balance, P&L statement, or balance sheet)
  • A Declaration confirming that turnover is not expected to exceed the mandatory registration threshold

-For any other reason

  • Include all relevant supporting documents that justify your deregistration request.

Step 3: Access the FTA Portal

  • Log in to your EmaraTax account.
  • From your dashboard:
  • Click “View” to open your Taxable Person Account.
  • Under the VAT section, select “Actions” → “De-Register.”

Step 4: Fill Out and Submit the Application

  • Complete the deregistration form with accurate information and upload all supporting documents.
  • Ensure all outstanding VAT liabilities are settled and that you’ve submitted your final VAT return before sending your application.

Step 5: Wait for FTA Review and Approval

After submission, the FTA will assess your application. You’ll receive a notification once it’s approved or if any additional details are needed.

Estimated time for application approval: 20 days

Penalties for Late VAT Deregistration

Late submission of the application and on the same date each month-

  • AED 1,000 for late submission
  • AED 1,000 per month thereafter (Max penalty: AED 10,000)

Final thoughts:

VAT deregistration is an important step for businesses that no longer meet the registration requirements or have ceased taxable activities. Ensuring that your documents are accurate and that all final VAT returns and liabilities are settled will help you complete the process smoothly and avoid any compliance issues.

At Hallmark, we’re committed to helping businesses stay compliant with UAE tax regulations. Our team can guide you through every stage of the VAT deregistration process from assessing your eligibility to preparing and submitting your application efficiently.

If you’re unsure whether your business qualifies for deregistration or need assistance with the process, contact Hallmark today for expert VAT support tailored to your needs.