Tax de-registration allows a registered taxable person to cancel his or her VAT registration. It signifies that the taxable person’s registration and VAT number have been deactivated. Tax de-registration can be requested by a VAT-registered individual or performed by the FTA if the individual fits the prerequisites for de-registration.
The vast majority of firms in the UAE that fit the criteria for VAT registration have already done so. A registered taxable person is expected to follow the VAT laws and procedures. Invoices must be issued in the proper format, returns must be filed on time, and taxes must be paid by the due date.
The VAT Law allows registered taxable individuals to revoke their VAT registration. Let us look at the situations under which a person can deregister from VAT and the procedure that must be performed.
The person stops making taxable supplies and does not expect to make any taxable supplies in the next 12-month period OR • The person’s taxable supplies or taxable expenses incurred over a period of 12 consecutive months are less than the voluntary registration threshold (AED 187,500) and he/she does not anticipate crossing this threshold in the next 30 days.It should be noted that a person who has voluntarily registered for VAT cannot apply for de-registration within 12 months of the date of registration.
The FTA has the authority to cancel a person’s registration if it is discovered that the registrant meets either of the two conditions for de-registration specified above. This is referred to as obligatory tax de-registration. As a result, VAT de-registration is a welcome option for individuals who have registered for VAT but no longer make supplies needing registration. Such individuals are not required to remain registrants and may request for tax de-registration if the appropriate conditions are met.
