All the businesses with an annual turnover of more than AED 375,000 are required to get themselves registered for VAT and submit the tax returns to the FTA (Federal Tax Authority). As long as the business is operating in the UAE, a valid VAT registration needs to be available with the business. However, there could be a need at times when the business is no longer operating in the UAE or not achieving the mandatory turnover limit over the year, in such cases the businesses could apply for a deregistration with the FTA.
If a business ceases to make or deal in the taxable supplies and if they are dealing in the taxable supplies, but are unable to have a turnover of AED 375,000 in the preceding 12 months must apply for the VAT deregistration within 20 business days from the occurrence of the event.
If a business whose taxable supplies were more than 187,500 had themselves registered voluntarily for VAT and 12 months have lapsed since the date of registration, then the business may apply for a voluntary deregistration.
On the FTA portal, after logging in with the credentials, you can click on the deregister button. While deregistering for VAT, all the details along with the effective date and the reasons for the deregistering needs to be submitted. All the required supporting documents also need to be submitted on the online portal.
It is crucial that the email address of the authorized signatory is updated in the portal and all the required declarations are read and confirmed at the time of deregistration. After deregistration has been submitted, the FTA may either approve or reject the application and the registrant or the authorized signatory is notified accordingly.
If the date of submission of the deregistration request is more than 20 business days from the date the taxable person and business is required and liable to de register then a penalty of AED 10,000 is to be paid by the taxable person as the late fee for the deregistration.
When a business gets themselves deregistered for VAT, it is imperative that all the outstanding liabilities are settled. The business can check the amount to be paid under the My Payment tab and pay all the outstanding amount to FTA. If the FTA is liable to pay the refund to the business at the time of deregistration, and the request for the deregistration is approved by the FTA, the business has the right to initiate the VAT refund process on the e services portal.
ARC Associates as one of the leading VAT consultants in the UAE assist the businesses in the timely fulfillment of the de registration formalities so that the hefty fine could be avoided.
For more information on Tax Deregistration services, contact us today.