VAT De-Registration in the UAE: Businesses Must Know in 2026

Are you planning your VAT deregistration in the UAE? Many businesses are aware of timely UAE VAT registration and timely VAT return filing, but frequently overlook the mandatory criteria that trigger VAT deregistration in the UAE. For companies existing in the market, restructuring or falling below the VAT threshold, it is a vital step to cancel the VAT TRN to prevent unnecessary penalties and compliance risk from the UAE Federal Tax Authority. Here comes the requirement for a VAT consultant in Dubai.

Jaxa Chartered Accountant, one of the best VAT consultants across the UAE and Dubai, with FTA tax agent certification in the UAE, helps to streamline VAT deregistration. Our team helps businesses to meet UAE FTA regulations, ensuring a timely and penalty-free compliance.

Your Guide to Cancelling VAT Registration in the UAE

VAT deregistration is a mandatory process of cancelling VAT registration in the UAE once the business ceases meeting the UAE FTA criteria. The process becomes mandatory when a company no longer qualifies for VAT registration, and it must apply for VAT deregistration with the UAE FTA to prevent costly penalties and ensure seamless compliance with UAE VAT regulations.

Understanding UAE VAT Deregistration Categories

Knowing the types of VAT deregistration in the UAE is crucial for companies to comply with UAE FTA regulations and ensure a hassle-free VAT exit.

1. Mandatory VAT de-registration:

   Businesses must apply for mandatory VAT de-registration if they meet the UAE FTA criteria:

• When a company ceases making taxable goods and services.
• If the annual taxable turnover in the past 12 months drops below AED 1875000.

Further:

• The deadline for submitting the VAT deregistration application is within 20 business days from the date of meeting the deregistration criteria.
• Failure to deregister VAT in the UAE on time can lead to penalties starting from AED 1,000 per month of delay up to a maximum of AED 10,000.

2. Voluntary Deregistration in the UAE:

   A Business may choose voluntary VAT deregistration in the UAE under certain situations:

• If the annual turnover is less than AED 375000 but exceeds AED 187500 in the past 12 months.
• If the company opts to cancel VAT registration, even while continuing business activities.

Businesses can request voluntary VAT deregistration at any time, provided they fulfill all compliance obligations, enabling a seamless and lawful exit from the VAT framework.

3. VAT Deregistration for Tax Groups in the UAE

The UAE FTA permits a VAT tax group to deregister VAT in the UAE when the tax group does not meet the required criteria:

• The economic, financial, or regulatory links between group members have ended.
• The business no longer meets the criteria for forming a tax group.
• The current tax group framework may create opportunities for tax evasion or reduce corporate tax payments.

Once the UAE FTA approves the deregistration, the group’s VAT registration is cancelled, and the assigned VAT number is inactivated. Companies willing to re-register must apply for a new VAT registration.

Essential Documents for VAT Deregistration in the UAE

For seamless VAT deregistration in the UAE, businesses are required to submit mandatory documents to the UAE FTA to successfully cancel their VAT registration.

• Cancelled trade licence, liquidation letter, and board resolution, if applicable
• Ministry of Labour employee visa cancellation letter
• Turnover declaration letter since VAT registration
• Proof of business activity cessation (if applicable)
• Sample invoices for verification

Ensure to submit all documentation with accuracy and 100% compliance to prevent delays or avoid UAE FTA penalties.

UAE FTA Penalties for Late VAT Deregistration

Failing to cancel the UAE VAT registration on time may result in several consequences:

• Administrative Penalties: For delayed deregistration, the UAE FTA can impose penalties of AED 1,000 each month, up to a maximum of AED 10,000.
• Ongoing compliance costs: Companies that delay deregistration may still be required to file UAE VAT returns, maintain VAT records, and undergo audits even after ceasing operations.
• Regulatory and financial risks: Postponing VAT deregistration could lead to financial liabilities and a complicated closure process.

How to Deregister from VAT in the UAE: Step-by-Step Guide

Looking to exit VAT registration in the UAE? Here we provide a step-by-step guide to deregister VAT through the UAE FTA Emaratax Portal.

Step 1: Log in to EmaraTax

• Visit the EmaraTax portal and log in to your existing account.
• Use the ‘Forgot Password’ option if login credentials are lost.

Step 2: Launch the Deregistration Process on EmaraTax

• Open the VAT module in EmaraTax and click on the ‘Deregistration’ option.
• Update your bank account information if required before submitting.

Step 3: Explain Your Deregistration Case and Attach Evidence

• Select the valid reason for requesting deregistration.
• Specify the effective date with proper justification.
• Submit turnover information and supporting financial data.

Step 4: Submit Your Application for FTA Review

• Double-check all details before submission.
• The FTA will evaluate your documents, verify past VAT returns, and confirm that no unpaid taxes or penalties remain.

Step 5: Get Final Approval from the FTA

• If further documentation is needed, you will receive a notification via your EmaraTax account.
• Once the FTA approves your request, your VAT (TRN) number will be officially cancelled.

Step 6: Post-Submission Compliance Steps

• Track Your Application: A unique reference number is issued for monitoring your deregistration status through the EmaraTax dashboard.
• Respond to UAE FTA Requests if additional documents or clarifications are needed.
• Final Filing: Submit a final UAE VAT return if required and settle all outstanding dues.
• Refund Handling: If you hold a VAT credit, initiate the refund process separately.
• Real-Time Monitoring: Keep checking updates on the EmaraTax dashboard

Common UAE VAT deregistration Pitfalls you must Avoid

Stopping a business operation is not an easy task. There might be common mistakes while deregistering a VAT in the UAE:

• Uncleared tax liabilities: Ensure UAE VAT outstanding dues are fully settled.
• Pending return filing: Failure to file UAE VAT returns will result in penalties and delay approval for deregistration from the UAE FTA.
• Labour clearance issue: Ensure to complete employee settlement or visa cancellation before deregistration
• Ignoring Required License Deactivation: Failure to cancel the license or permits, the business must incur renewal fees.
• Bank Account Closure Delays: Ensure to close the corporate bank account and clear outstanding dues before closure

Your Next Step Towards a Hassle-Free VAT Deregistration Journey in Dubai with Jaxa Auditors

 Navigating the VAT deregistration process can feel effortless when partnering with one of the best accounting, auditing, and taxation firms in Dubai- Jaxa Chartered Accountants, also a UAE FTA tax agent certified, ensures a seamless, stress-free experience from beginning to end, along with 100% accuracy, transparency, and compliance.

Jaxa Auditors provides the best VAT deregistration services in the UAE. Our team of immensely qualified VAT consultants in the UAE provides timely VAT registration, VAT return filing, VAT compliance, VAT audit, and corporate tax services in the UAE.

Our VAT services include

• Verify VAT deregistration eligibility
• UAE VAT return support
• Guidance from a UAE FTA-certified tax agent
• Ensure smooth UAE FTA approval
• Settle any remaining VAT obligations
• Ensure 100% UAE VAT compliance

If your business is seeking VAT registration or deregistration support in Dubai, contact us now for more assistance.