2021-02-09 04:43:04
It has been three years now since the introduction of VAT in the UAE. VAT registration with the Federal Tax Authority (FTA) is crucial for any business now in the UAE, however VAT deregistration is considered a vital item in VAT implementation, organizations should have a comprehensive understanding of when and how they should apply for VAT deregistration to prevent the penalty of AED 10,000 for late application for VAT deregistration. In this article we will be discussing VAT deregistration in details though starting by describing VAT deregistration, who is eligible for VAT deregistration, the process of it and how can MHM help you with VAT deregistration. What is VAT Deregistration? VAT deregistration is a process where the registered companies are required to cancel their VAT registration with the FTA. The deregistration process becomes mandatory when the taxable company ceases its operations, or the requirement of VAT registration is no longer needed. The taxable businesses need to apply for VAT deregistration and the FTA will cancel the registration once it receives the application after the successful submission of the required documents. Who is eligible for VAT Deregistration in the UAE? • Voluntarily, A registered company that no longer deal with taxable supplies can apply for VAT deregistration. • Voluntarily, A registered company that deals with taxable supplies can apply for VAT deregistration if the value of the taxable goods and services is decreased by the prescribed threshold of AED 375,000 but above the voluntary threshold of AED 187,500. • Mandatory, A registered company that deals with taxable supplies must apply for VAT deregistration if the value of the taxable supplies is below the voluntary threshold of AED 187,500. How to deregister for VAT in the UAE? The companies opting for VAT deregistration are required to submit the application to the FTA. The necessary details and the reason for the deregistration should also be submitted. The FTA will verify the reason and if it is found to be valid then the authority will approve the voluntary deregistration. The FTA will also verify the following: 1. Status of Returns 2. Outstanding tax payments 3. Any penalties that are pending A pre-approval for VAT deregistration can be secured if the reason is valid. However, the final approval will be on hold until the outstanding payments are cleared. Deregistration for VAT Groups The eligibility for the VAT deregistration of VAT groups is the same as the criteria for the individual taxable entities. However, certain other criteria also apply to the VAT groups for applying for deregistration: 1. The VAT deregistration will be approved if the group no longer meets the conditions to be considered as a VAT group. 2. The group could be granted deregistration if the constituent member companies are no longer financially associated with the group. 3. Deregistration will be approved if the FTA anticipates the tax status of the group may lead to tax evasion. VAT Consultants in UAE MHM has been a leader player in providing Taxation services for corporates. Our team of VAT experts will support you to the VAT process and frame it in the most beneficial way to reduce your cash outflow during tax payment stage, through delivering a wide range of services in VAT registration such as: • Consultation • VAT Registration and VAT Group Registration • VAT Deregistration and VAT Group deregistration • VAT Compliance and Control • VAT Filing and Payment • Data Record and Management • Accounting Contact us now to claim your VAT Deregistration free consultation.
