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VAT De-Registration

Litrix simplifies the VAT de-registration process, ensuring compliance and efficiency for your business.

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VAT-Deregistration

What is VAT De-Registration?

VAT deregistration in the UAE is required when a business ceases to engage in taxable supplies and no longer meets the thresholds for mandatory or voluntary VAT registration.

Litrix Business Solutions is a leading provider of VAT deregistration services in the UAE, helping businesses navigate the process when they no longer qualify for VAT registration.

Our tax experts are here to assess your situation and clarify your VAT obligations. If your annual turnover remains above the threshold, you will need to continue with VAT registration. However, if you no longer meet the criteria for VAT registration, we will guide you through the deregistration process.

There are several reasons a business might consider VAT deregistration, but if the reason doesn’t meet the conditions specified by VAT regulations, you may not be eligible. At Litrix Business Solutions, we help you evaluate whether your business qualifies for VAT deregistration and ensure that the process is carried out smoothly.

Our VAT Deregistration Services

A VAT-registered business in the UAE can cancel its VAT registration, which will result in the suspension of its Tax Registration Number (TRN). If you meet the eligibility criteria for VAT deregistration with the FTA, Litrix Business Solutions can assist you in completing the process. It’s important to note that failing to deregister on time may lead to penalties, so timely action is crucial.

Eligibility conditions for UAE VAT deregistration

If you are a natural or legal person registered for VAT in the UAE, you may apply for VAT deregistration if you meet any of the following conditions:

  1. Cease making taxable supplies: If you stop making taxable supplies and do not expect to resume within the next 12 months, you must apply for VAT deregistration.

  2. Below voluntary registration threshold: If you continue to make taxable supplies but the total value of your supplies and imports is below the voluntary registration threshold of AED 187,500, you should deregister from VAT.

  3. Below mandatory threshold after voluntary registration: If your taxable supplies and imports are below the mandatory registration threshold of AED 375,000 and you have been voluntarily registered for VAT for at least 12 months, you may apply for VAT deregistration.

Once you meet any of these criteria, you must apply for VAT deregistration within 20 business days. Failure to do so within the specified timeframe may result in penalties imposed by the FTA.

Procedure for VAT deregistration in UAE

VAT deregistration in the UAE is a straightforward process that can be completed efficiently. To begin, follow these steps:

  1. Log into the FTA VAT portal: Access the FTA VAT portal and log into your VAT account. Once logged in, you will be directed to the dashboard, where you will find the VAT registration tab.

  2. Initiate the deregistration process: Click on the “Deregister” button to open the VAT deregistration application, which will contain all the necessary details about your taxable status.

  3. Select the reason for deregistration: In the application, you will be asked to choose the reason for your VAT deregistration. You can select from the following options:

    • You have ceased business operations.
    • You are no longer making or importing taxable supplies.
    • Your taxable supplies are now below the voluntary registration threshold.
    • You are making taxable supplies above the voluntary threshold but below the mandatory threshold.
    • Any other valid reason that meets the FTA’s eligibility criteria.

  4. Provide the effective date: Indicate the effective date for your deregistration eligibility.

  5. Upload supporting documents: Ensure you upload all required supporting documents for your VAT deregistration. Review all the documents for accuracy, complete the declaration form confirming their correctness, and then submit the application to the FTA.

By following these steps, your VAT deregistration will be processed smoothly, provided all the necessary information and documentation are in order.

Impact of VAT De-Registration on Business Operations

Cash Flow Management

No longer charging VAT may reduce revenue; adjustments to cash flow forecasts are necessary.

Cost Structure Changes

Increased operational costs due to the inability to reclaim input VAT, potentially lowering profit margins.

Business Reputation

De-registration can raise concerns about financial stability; clear communication is essential to maintain stakeholder confidence.

OUR VAT SERVICES INCLUDE THE FOLLOWINGS:

VAT Solutions
VAT FAQs
VAT Returns Filing
VAT Consultants
VAT Fines
VAT Overview
VAT Implementation
VAT Assessment and Appeals
VAT Refund Assistance
VAT Compliance Audit

FAQS

If we stop our operations, should we deregister from VAT?

If you cease making or importing the taxable supplies for which you were VAT-registered in the UAE, you are required to proceed with VAT deregistration. During this process, you must provide a company liquidation letter from the government, along with detailed financial records to the FTA.

What are the reasons the FTA might reject a VAT deregistration application?

If the FTA does not find the reasons for deregistration valid or if the business does not meet the necessary requirements, the application will be rejected.

Is there anything we need to manage after the VAT deregistration application has been pre-approved and reviewed?

After the FTA pre-approves your VAT deregistration, you are required to submit a VAT return. The FTA will then change the status to "under review," and you’ll need to submit another VAT return. Following this, the FTA will proceed to cancel your VAT registration. Once you are deregistered from VAT, it's important to retain your VAT records and keep your bank account active. These records are crucial for any future VAT audits, and you will need the bank account to receive any VAT refunds that may arise from your return.

If You Are Interested?

Contact us today for a consultation, and let’s get your business up and running in just a few days. Together, we can turn your vision into reality!

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