VAT Deregistration Services in UAE : A Comprehensive Guide for Businesses
The implementation of Value Added Tax (VAT) on January 1, 2018, altered the taxation system in the UAE. In contrast, VAT registration was compulsory for businesses cross above specific thresholds and, in some instances, taxation devolved registration is a must. Comprehending how to deal with the taxation dissolution processes is fundamental to tax compliance.
What is VAT Deregistration?
Deregistration of Value Added Tax registration is when a corporate entity cancels its tax registration with the Federal Tax Authority in the United Arab Emirates. Therefore, the company no longer has any obligation to charge tax on sales or to file value-added tax returns. There is voluntary deregistration as well as obligatory deregistration depending on the situation.
Under Which Conditions Is VAT Deregistration Required?
Under the local UAE law, enterprises are obliged to deregister as a value-added service tax within twenty operating days of meeting any of the following conditions:
- Emergence of Taxable Supplies Cessation- No longer doing business and there is no anticipation of doing any in the coming twelve months.
- Annual Turnover Threshold: The last twelve months saw the business achieve a turnover of less than AED 187,500.
- Sale of Business: The business undertakings have been subsumed under the new owner, who is VAT registered separately.
- Other Reasons: Any reason that covers the conditions for VAT deregistration justified through any other VAT reasons for deregistration.
Not applying within the provided timeframe can incur a penalty of AED 10,000 and an additional AED 10,000 for every month of delay thereafter.
Businesses may choose to apply for voluntary VAT deregistration if they meet these conditions:
- 12 Months Since Registration: It has been a year since the time of registration for VAT.
- Annual Turnover Below Threshold: Last year’s business taxable supplies stand at less than the mandated registration limit of AED 375,000.
In such scenarios, businesses are allowed to apply for deregistration at any point. Though, it’s recommended to speak to a VAT specialist to remain compliant and mitigate any risks.
The steps involved in the process of VAT deregistration include:
EmaraTax login: Log into the FTA’s EmaraTax portal using the relevant credentials.
Submit Deregistration Application: Click on the VAT section and select the VAT deregistration option. Fill in all the information needed, add a logic for deduction, and furnish all supporting documents, then submit the application.3. Upload Supporting Documents: Based on the reason for deregistration, it may be necessary to upload additional documents such as:
- Deregistration letter of the trade license.
- Financial statement documents.
- Letter from the Ministry of Labour confirming employee headcount.
- If applicable, sale agreement document.
Final VAT Return: Submit the final VAT return and pay any remaining dues.
Deregistration Certificate: Following processing of the application by the FTA, a certificate of deregistration will be granted certifying the Deregistration of VAT registration.
The Significance of VAT Deregistration Services in The UAE The use of professional VAT deregistration services brings about the following:
- Expert Guidance: A consultant in VAT will have a thorough understanding about tax policies of the UAE and offer the business customized guidance.
- Efficient Process: The professional remedies the entire deregistration, submission, and compliance process in a timely manner relative to set deadlines.
- Risk Mitigation: Ensuring all documents are in order, VAT consultants assist in protecting businesses influenced with penalties and severe legal constraints.
- Post Deregistration Assistance: Some VAT specialists provide continuous support helping businesses with issues regarding the deregistration.
Selecting the Ideal Service Provider Specializing in VAT Deregistration
Keep in mind the following tips when choosing a VAT Deregistration service provider in the UAE:
- Experience and Expertise: Work with a firm specializing in VAT deregistration who understands the nuances of UAE tax laws.
- Comprehensive Services: Choose service providers that take care of everything from application to post-deregistration support.
- Clear Communication: Make sure the provider has reasonable prices and outlines pricing structures clearly.
- Social Proof: Check online reviews and other forms of testimonials to validate the client’s reliability.
Final Thoughts
For businesses in the UAE whose operations no longer require VAT registration, the VAT deregistration process becomes crucial. Ensuring compliance with the outlined requirements is essential to prevent incurring unnecessary penalties should professional assistance be sought. Having a substantial amount of VAT deregistration service simplifies the procedures while offering peace of mind and allows the business to focus on core operations.
Visit VAT Registration UAE for more information regarding VAT deregistration services in the UAE.