How to Deregister from VAT in UAE? (Cancel VAT)

How to Deregister from VAT in UAE? (Cancel VAT)

A business must apply for VAT deregistration on the EmaraTax portal when it no longer meets the registration requirements under UAE VAT Law. If it fails to do so, the FTA may issue penalties, require continued VAT return filings, or conduct an audit.

This blog provides a complete overview of VAT deregistration in the UAE.

What Is VAT Deregistration?

VAT deregistration is the process of cancelling a business’s Tax Registration Number on the EmaraTax portal when it no longer meets the conditions under UAE VAT Law. A business must apply if it has stopped making taxable supplies or no longer qualifies for registration. 

Who Is Eligible for VAT Deregistration?

A business will be eligible to apply for VAT deregistration on EmaraTax if it meets any of the following conditions:

• The business has permanently stopped making taxable supplies and will not resume. This requires mandatory deregistration within 30 days of cessation.
• The taxable turnover in the last 12 months is below AED 187,500, and future turnover will remain below this voluntary threshold.
• A VAT group no longer meets the Federal Tax Authority’s group registration criteria due to structural or legal changes.
• A non-resident entity has ceased all taxable activities in the UAE on a permanent basis.

When to Apply for VAT Deregistration?

• A business must submit its VAT deregistration application within 30 calendar days from the date it becomes eligible under the UAE VAT Law.
• For mandatory deregistration, this period begins from the date taxable supplies cease permanently.
• For voluntary cases, it starts when taxable turnover falls below AED 187,500 and is not expected to exceed it in the next 30 days. 

Penalties for Late VAT Deregistration

Checklist to Complete Before VAT Deregistration

Before you submit a VAT deregistration application on the EmaraTax portal, make sure to complete all of the required steps so the FTA will process the application without any delays.

• Unlink from the Tourist Refund Scheme (TRS)
  
  If the business is registered for TRS, the system will not process the VAT deregistration application until you complete the TRS deregistration on EmaraTax.
   
• File all outstanding VAT returns
  
  Submit all VAT returns up to the date of eligibility for deregistration. The application will not proceed unless the FTA receives all required filings.
   
• Settle any outstanding VAT liabilities and administrative penalties
  
  Pay all due VAT amounts and fines before submitting the application. The FTA will reject the request if unpaid balances exist on the account.

Step-by-Step VAT Deregistration Process in EmaraTax

Follow the below steps on the EmaraTax portal to complete your VAT deregistration application.

Step 1 – Log in to the EmaraTax Portal

Log in using your registered email and password or access the portal via UAE Pass. If you enabled two-factor authentication, enter the OTP sent to your email and mobile number.

Step 2 – Open the VAT Tile and Select Deregister

From your dashboard, select the relevant Taxable Person. Open the VAT tile, click ‘Actions’, and select ‘Deregister’ to start your application.

Step 3 – Review Business Information

Click ‘Edit/Review’ to update your bank details if necessary. If you’re registered in the Tourist Refund Scheme, ensure you complete TRS deregistration before continuing.

Step 4 – Read and Confirm the Guidelines

Read the VAT deregistration instructions carefully. Tick the checkbox to confirm your understanding, then click ‘Start’ to proceed.

Step 5 – Select the Basis of Deregistration

Choose the appropriate reason for deregistration. EmaraTax will display the relevant fields and require you to upload supporting documents based on your selection.

Step 6 – Enter Deregistration Dates

Enter the eligible date for deregistration. EmaraTax will auto-fill the effective date, but you may change it by providing a valid reason.

Step 7 – Submit Taxable Supplies Data

Enter your taxable supply values in AED either by uploading the completed Excel template or entering the data directly in the portal.

Step 8 – Submit Taxable Expenses Data

Enter your taxable expense figures using the same method—upload the Excel file or input the values directly.

Step 9 – Confirm Authorized Signatory

Verify the authorized signatory details. 

Step 10 – Review and Submit the Application

Review all the information you entered. Tick the declaration checkbox, click ‘Submit’, and then confirm by clicking ‘Yes’. The system will generate a reference number for tracking.

Deregistration Review Process

Once you submit a VAT deregistration application on the EmaraTax portal, the system will generate a reference number. You can use this number to track the status of the application on the dashboard.

The Federal Tax Authority will review the application and will either approve it or reject it or request additional information. You will receive status updates through email as well as SMS from the EmaraTax portal.

If the FTA issues a pre-approval, the system will generate a final VAT return. You must submit this return and settle any outstanding VAT liabilities and penalties before the FTA completes the deregistration.

The FTA will approve the application only after confirming that:

• You have filed all required VAT returns
• You have paid all outstanding VAT and administrative penalties
• You have no pending obligations on the tax account

If your account reflects a credit balance, you must submit a refund request on EmaraTax. If you have an outstanding balance, you must complete the payment before the deregistration is finalised.

How to Track Your Deregistration Status in EmaraTax

After submitting your VAT deregistration application, you can check the status on the EmaraTax portal using the reference number.

Steps to check the status:

1. Log in to EmaraTax with your email and password or UAE Pass
    
2. Go to the dashboard and choose the right Taxable Person
    
3. Click on the VAT section to open your deregistration request
    
4. View the current status like Submitted, Pre-approved, Rejected, or Additional Information Required
   
    

Note: You will also get status updates by email and SMS.

Filing the Final VAT Return After Deregistration

If the FTA gives a pre-approval for your VAT deregistration, the EmaraTax portal will automatically create a final VAT return. This return will cover the period ending on the effective date of the deregistration.

You must do the following:

• Log in to the EmaraTax portal and open the final VAT return under the name of the Taxable Person
   
• Fill in the return with the final taxable supplies, input tax, and any needed adjustments
   
• Submit the return and pay all VAT amounts due within the deadline given by the FTA

Note: The FTA will not approve the deregistration unless you file the final return and pay all dues in full.

FAQ

1. When does the FTA approve a VAT deregistration request?

The FTA will approve a VAT deregistration request after you:

• File all pending VAT returns
   
• Pay all outstanding tax and penalties
   
• Submit the final VAT return on the EmaraTax portal

The deregistration will not be completed until all of these steps are done.

2.Do I have to file a final VAT return after deregistering on EmaraTax?

Yes. If the FTA pre-approves your application, EmaraTax will generate a final VAT return. You must complete and submit it, then settle any remaining VAT liabilities before the deregistration is finalised.

3.Do I need to cancel the Tourist Refund Scheme before applying for VAT deregistration?

Yes. You must cancel the Tourist Refund Scheme on EmaraTax first. The FTA will not process your VAT deregistration until then.

4.How long does the FTA take to approve a deregistration?

The FTA does not provide a fixed timeline for approval.