The VAT Deregistration process is easy and simple however, there are a few things that you need to know and carefully execute every step; otherwise, it can cost you a fortune. There are many reasons to deregister. Some of the reasons for deregistration are:
- If the business is not making any taxable supplies it should deregister
- If the business will not make a taxable supply in the future it should deregister
- Conversion of business such as changing from a sole proprietor to a company
- If the business is sold
- The business has intentions to join a group registration
- If it was a member of a group registration and now the group no longer exists.
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CHECKING CASE STUDIES
Checking your case according to U.A.E's executed VAT Law.
Registering your setup for VAT.
VAT GUIDELINES AND CONTROLS
Keeping up your correct records according to VAT guidelines and controls.
SETTLING VAT ISSUES
Settling VAT related payment issues at ideal time.
Filing and maintaining VAT returns.
RESOLVING DISPUTED ISSUES
Resolved disputed issues identified with VAT.
VAT De registration in DUBAI
In general, if the business terminates the VAT registration it is known as VAT Deregistration. In the DUBAI, however, deregistration of VAT occurs when a particular business or a company cancels the VAT registration with FTA i.e., Federal Tax Authority. There can be many reasons for the cancellation of the VAT. Also, the reasons to cancel the VAT must be valid, otherwise, the FTA might not approve the application for deregistration. It is why many businesses hire VAT deregistration services to pursue their case and to ensure that their VAT is canceled. Every condition for the VAT Deregistration should be fulfilled according to the FTA law to get the approval.
If you own a taxable business in Dubai or are a taxable individual, you must consider the process of VAT Deregistration just as registration for VAT. Registration and deregistration are both equally important in Dubai. Every businessman who owns a small or a large business in Dubai must know the process for registration and also deregistration for VAT. If the individual or the business fails to follow the rules for deregistration for VAT the FTA can impose penalties on the firm or the individual according to the law.
Eligibility for VAT Deregistration
The following are the criteria that make a business or an individual eligible to apply for VAT Deregistration in DUBAI.
Mandatory Deregistering VAT
If a business stops dealing with taxable goods or taxable services it becomes eligible for deregistration. Moreover, according to the law, it becomes mandatory to deregister its VAT in Dubai if the businesses’ expenses or taxable supplies from the past twelve months do not exceed the VAT deregistration threshold which is AED 187,500. If a business or an individual who is a VAT registered and falls under this criteria should never delay deregistering its VAT in Dubai to avoid the VAT Deregistration penalty.
Note: If a firm or a business which is FTA registered becomes eligible for VAT deregistration following the above criteria, the company or the business only has 20 days before it applies for the deregistration. If the twenty days pass, the FTA will impose penalties for late application.
Voluntary Deregistering VAT
Another criteria for deregistration of VAT in Dubai is if a company has registered for VAT:
- If the company still deals with taxable goods and services. However, the company’s expenses or supplies were fewer than the mandatory VAT deregistration threshold for the past 12 months
- AND, it has been more than 12 months since the company has registered as VAT under FTA rules.
In this case, a business can voluntarily opt for VAT deregistration. Also, there is no limit on the number of days to apply for the deregistration process through FTA.
How to Cancel Vat Registration In DUBAI?
Once a business becomes eligible for deregistering VAT in Dubai, the company or the business can log on to the official FTA portal after creating an account. Once logged, the business can enter its details and start the process by filling the VAT deregistration form. The businesses can also give reasons for deregistration. Filling the form is easy. Some data is already filled which makes the process easier.
Once the form is filled and the application forwarded to the FTA, the FTA will approve the application depending on the reasons provided and also:
- After the businesses have cleared its outstanding taxes
- The business has filed all of its returns
- The business has paid all the Administrative Penalties if there were any
If there is a case of late submission, the FTA will not approve unless the entity has paid the late submission penalty.
VAT Deregistration Penalty
If the entity falls under the mandatory deregistration of VAT and does not submit the application within 20 days, the FTA will impose a penalty of AED 10,000.
Post Submission of Application
Once the entity fills the online VAT deregistration form and submits it online with all the reasons and details, the applicant will receive an SMS. The entry will receive the SMS on the registered number they used while applying.
Once the entity applies, the FTA will then assess the application. The FTA analyzes the reasons for registration and ensures all the penalties, remaining charges, or tax payments are completely paid. If the application is according to the FTA rules and regulations, it will approve the application otherwise it will not be approved.
VAT Deregistration for Groups
The VAT Deregistration process for groups in DUBAI is almost the same as that of individuals. The difference is only in the criteria for the deregistration of VAT.
The groups have to fulfill all the requirements to deregister the VAT in Dubai, in addition to those requirements the groups also need to have the following reasons to become eligible for VAT deregistration in Dubai:
- The FTA will only approve the application for deregistration of VAT if the registered entity does not meet the requirements to be a group or is not considered as a group anymore
- FTA will also approve deregistration of VAT if the company is no longer associated in any ways with the group
- The FTA can also initiate the VAT registration cancellation process for a group if it deems that the group will not be able to pay taxes and can result in tax evasion.