ITC Accounting and Tax Consultancy

VAT Deregistration - Circumstances In Which Deregistration is Applicable for Businesses

If your business has fallen below the threshold or is undergoing significant changes, applying for VAT Deregistration can simplify your tax obligations. Stay compliant and focus on what matters most to your success.

VAT Deregistration refers to the process of canceling a business’s registration for Value Added Tax (VAT). This means that the business will no longer be required to collect and remit VAT on its supplies.
In the United Arab Emirates (UAE), businesses may choose to deregister for VAT under certain circumstances. Here are some situations where VAT deregistration may be applicable:

  • Falling below the Threshold: If a registered business’s taxable supplies over the past 12 months or expected taxable supplies over the next 30 days fall below the mandatory registration threshold (AED 375,000), the business can apply for deregistration.
  • Cessation of Business Activities: If a business permanently ceases its operations or intends to do so in the near future, it can apply for VAT deregistration. This typically involves closing down the business and settling any outstanding VAT obligations.
  • Transfer of Business: If a registered business transfers all or part of its assets, including VAT registration, to another entity, it may apply for deregistration. The recipient of the assets should apply for a new VAT registration.
  • Change in Legal Entity: In case of a change in the legal form or structure of a business, such as conversion from a sole proprietorship to a partnership or a change in ownership resulting in a new legal entity, VAT deregistration may be necessary.


To apply for VAT deregistration in the UAE, businesses need to submit an application to the Federal Tax Authority (FTA). The application should include relevant details and supporting documents explaining the reason for deregistration.

It’s important to note that deregistration for VAT does not absolve a business from fulfilling its obligations and responsibilities until the effective date of deregistration. This includes filing VAT returns and making any outstanding VAT payments.

If you are considering VAT deregistration or have specific questions regarding your situation, it is advisable to consult with the official sources such as the Federal Tax Authority (FTA) or seek professional advice to ensure compliance with the applicable regulations and procedures. ITC Tax Consultancy with its tax expert’s support will help you do it without any hassle. Talk to our tax experts now!

This article was published on  19 May 2023

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