UAE VAT Deregistration: Your Easy 2025 Guide

So, you're thinking about saying bye-bye to VAT in the UAE? It happens! Maybe your business has taken a new turn, or your sales numbers have changed. Whatever the story, officially cancelling your Value Added Tax (VAT) registration with the Federal Tax Authority (FTA) is a smart move to keep things running smoothly.

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You know, just like getting your VAT sorted was a big deal at the start, knowing how to deregister is just as vital down the line. This simple guide for 2025 will walk you through the ins and outs of UAE VAT deregistration.

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We'll look at why this might be the right move for you, the key numbers to remember, the actual steps to take, and those all-important deadlines. We want to make sure your exit from the VAT system is as easy as pie.

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UAE VAT Deregistration: Key Facts and Steps

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Okay, so VAT deregistration is basically the official way your business cancels its VAT registration with the UAE government. Once they say "yes" and your Tax Registration Number (TRN) isn't active anymore, you don't have to add VAT to your sales anymore, and you can't claim any VAT back on your purchases. It's like you're stepping outside the UAE's VAT circle.

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It's fair to say that while getting VAT registered felt like a big step, knowing how to deregister when the time is right is just as vital. Getting this wrong or ignoring it can lead to fines and loads of extra paperwork – and nobody wants that!

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When to Deregister from VAT in the UAE

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Generally, there are two main reasons why you might find yourself needing to deregister for VAT:

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1- Mandatory VAT Deregistration: When You Must

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You have to apply for VAT deregistration if:

• Your business stops trading or doesn't make any sales that have VAT on them anymore. Pretty straightforward, right? If that part of your business is over, you need to deregister.

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• Your taxable sales for the last year dropped below a certain point. That point is AED 187,500 (around USD 51,050) per year. If you're under that, and it doesn't look like you'll go above it again soon, you're required to deregister.

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2- Voluntary VAT Deregistration: When It's Your Choice

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You can choose to deregister if:

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• Your yearly taxable sales fall below AED 375,000 (USD 102,100), but they're still above that AED 187,500 mark. In this case, it's up to you whether you want to deregister or not.

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• You signed up for VAT voluntarily way back, and it's been more than a year. If you don't want to be VAT registered anymore, you have the option to cancel your TRN.

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So, the big things to think about are how much you're selling and whether you're still selling things that have VAT on them. If those numbers drop or your business changes direction completely, deregistration might be the way to go – either because you have to, or because it makes good sense for you.

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Alt: UAE VAT thresholds comparison with AED 375,000 and AED 187,500 for deregistration eligibility

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UAE VAT Deregistration: Key Sales Limits

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The UAE VAT rules have two main sales figures you really need to keep in mind:

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• AED 375,000 (USD 102,100): This is the number for when you have to get VAT registered. if your sales go below this, you can choose to deregister.

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• AED 187,500 (USD 51,050): This is the number for when you can register for VAT if you want to. well, if your sales drop under this, you usually have to deregister, especially if they're not likely to bounce back up.

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Can you imagine having to keep track of all these numbers? And of course, if you decide to close your business or go through liquidation, you absolutely have to deregister for VAT, no matter how much you were selling. Getting the deregistration process right and doing it on time is super important because messing it up can lead to fines. You'll want to make sure you get this done correctly and within the right time frame.

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Step-by-Step: Deregistering for VAT in the UAE

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Okay, so deregistering for VAT isn't just about filling in one form. There's a specific way you need to do it:

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Step 1: Access the EmaraTax Portal

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First off, you'll need to head to the EmaraTax portal. Just use your usual login details (your username and password) to get in.

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Step 2: Start Your Deregistration Application

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Once you're logged in, find the "VAT Services" section. There should be an option there to start a VAT deregistration application. You'll need to fill out an online form and tell them why you want to deregister. Common reasons are "sales below the limit" or "stopped making taxable sales."

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Step 3: Give Them the Right Documents

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Along with your application, you'll probably need to upload some documents. These could be:

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• Your trade license cancellation, especially if your business has closed.

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• Financial statements that clearly show your sales numbers are below the limit.

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• If it applies, proof that your business has closed or that you've deregistered employees.

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• Proof that you've paid any tax you owed or any fines. The FTA will want to make sure everything is settled before they say yes to your deregistration.

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Step 4: Double-Check and Send It Off

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Before you click "Submit," take a good look at everything you've filled in and all the documents you've uploaded. Make sure it's all correct. Once you're sure, go ahead and submit your application to the FTA. After you send it, the status will typically show as "Pending," which means they're taking a look at it.

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Step 5: File Your Last VAT Return

If the FTA says "yes" to your deregistration at first, they'll likely ask you to file one last VAT return. This return will cover the period up to your effective deregistration date. You'll need to declare any VAT due on your sales during this final period. If you're owed any money back (input tax credits), you might be able to claim that on this final return too.

Step 6: Await Official Approval and Certificate

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After reviewing your application and final VAT return, the FTA will issue their official decision. If approved, your VAT registration will be cancelled, and you'll be able to download your VAT Deregistration Certificate from the EmaraTax portal. This certificate is your official confirmation.

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Important Timeframes and Deadlines for VAT Deregistration (2025)

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Staying aware of these deadlines is crucial to avoid penalties:

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• Application Submission: You must apply for VAT deregistration within 20 business days from the date you become eligible (e.g., the date your turnover fell below the threshold or the date you ceased taxable supplies).

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• FTA Review Period: The FTA typically takes around 20 working days to review deregistration applications. But keep in mind, it could take longer if they need more info from you.

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• Final Return Deadline: Your final VAT return is usually due within 28 days from the day your VAT deregistration becomes official, unless the FTA tells you otherwise.

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So, acting quickly is key here. If you take too long to apply (more than 20 business days), you could end up paying a fine of up to AED 10,000!.

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What Happens After VAT Deregistration?

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Once your VAT deregistration is official and your TRN is no longer valid, there are a few things you need to do (and not do):

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• Stop Charging VAT: You absolutely must stop adding VAT to any sales you make after your deregistration date.

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• Stop Claiming Input Tax: You can't claim back any VAT on costs your business has after you're deregistered.

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• Keep Your Records: You'll need to hold on to all your VAT-related business records for at least five years after you deregister (and up to 15 years for certain property-related records). The FTA can still do checks, and you'll need to be able to show them old invoices and VAT returns if they ask.

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How to Avoid Fines and Penalties During VAT Deregistration

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To make sure your VAT deregistration goes smoothly and you don't end up with any unexpected fines, keep these points in mind:

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• Apply on Time: Make sure you get your application in within that 20-business-day window after you become eligible to deregister. Missing this can cost you!

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• Keep Filing Returns: Even after you've applied, you still need to file your regular VAT returns until the FTA officially confirms your deregistration. Even if you had no sales, you still need to file.

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• Settle Up: Make sure you've paid any tax you owe and any penalties before you apply to deregister. If you still owe money, they won't finalize your deregistration.

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• Provide Accurate Information: Double-check all details and supporting documents before submitting your application.

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Staying organized and acting promptly are the best ways to avoid any unwanted fines or complications. If you need assistance in ensuring all aspects of your deregistration are handled correctly, Alpha Pro Partners offers expert support.

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The Legal Side of UAE VAT Deregistration (2025)

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VAT deregistration in the UAE is governed by specific articles within the Federal Decree-Law No. 8 of 2017 on VAT and further detailed in Cabinet Decision No. 52 of 2017 (Executive Regulations). Additionally, FTA decisions outline the administrative penalties for non-compliance, including the timelines for deregistration. Staying updated on any amendments to these laws and regulations and checking official FTA guidance is crucial to ensure your business remains compliant.

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Final Thoughts on Saying Goodbye to VAT

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VAT deregistration, while it has its rules, is pretty manageable if you know what to do. If your business isn't making taxable sales anymore or your sales have dropped below that mandatory limit, then deregistering is either something you can do or something you have to do. Also, if you're closing your business down, it's not just a form to fill out – it's a legal requirement.

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So, the key to a smooth VAT deregistration is to follow all the steps carefully, make sure you keep your records in order even after you're deregistered, and file that final VAT return accurately and on time. By knowing what to do and meeting those deadlines, you can save your business from unnecessary costs and make your exit from the UAE's VAT system a clean one.

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What do you think? If you're at all unsure about whether you should deregister or if you have a bit of a complicated situation (like closing part of your business, being in a VAT group, or having a lot of stock), it's always a good idea to get some advice from tax experts or check the official FTA guidelines.

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I think it's worth remembering that getting your deregistration right is just as important as getting your registration right in the first place.

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Need some expert help with getting your VAT deregistration sorted in the UAE? Alpha Pro Partners has helped loads of businesses just like yours. You won't believe how much easier they can make the whole process. Get in touch with today!

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Frequently Asked Questions (FAQ) About UAE VAT Deregistration

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Q: What's the very first step my business should take if we believe we need to deregister for VAT?

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A: Here’s what I think... First, take a good look at your business activities and your sales over the last year. See if you meet the rules for mandatory or voluntary deregistration. Then, start getting your documents together. If you're not totally sure, it's always smart to chat with tax pros like Alpha Pro Partners to get some clear advice.

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Q: How long does the FTA usually take to say "yes" or "no" to a VAT deregistration application?

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A: Usually, they aim to take around 20 working days after you submit your application. well, it can take a bit longer depending on how complicated things are and how many applications they're dealing with. Making sure your documents are clear and correct can help speed things up.

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Q: Do I still need to file VAT returns after I've applied to deregister?

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A: Yes, absolutely! You need to keep filing your regular VAT returns until you get the official word from the FTA that your deregistration is complete. This includes any time while they're looking at your application. Even if you had no sales, you still need to file.

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Q: What kind of documents might the FTA ask for when I apply for VAT deregistration?

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A: It can depend on why you're deregistering. Common ones are your trade license cancellation (if you closed), financial statements showing your sales are below the limit, proof you closed down, and proof you've paid any tax or fines you owed. Alpha Pro Partners can tell you exactly what you'll need for your situation.

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Q: What happens if the FTA says "no" to my VAT deregistration application?

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A: If they reject it, they'll usually tell you why. Take a close look at their reasons, fix any problems or give them any missing info, and then you can apply again.

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Q: How long do I need to keep my business records after I've successfully deregistered for VAT?

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A: You're legally required to keep your business records for at least five years after the day you deregister. For some property-related records, it's even longer – up to 15 years.

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Q: Can Alpha Pro Partners handle the whole VAT deregistration process for my business?

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A: Absolutely! Alpha Pro Partners offers full support for VAT deregistration in the UAE. Our services include assessing your eligibility, assisting with document preparation, managing the application submission through EmaraTax, ensuring accurate final VAT return filing, and liaising with the FTA on your behalf, providing a streamlined and stress-free experience. Get in touch with them today to learn more about how we can assist you.