MANDATORY DE-REGISTRATION AS PER FTA REGULATION
VAT-registered companies with a taxable supply of less than 187,500 in the past consecutive 12 months, are to de-register on or before January 20, 2019. Failure at doing so will result in the company being charged with a penalty fee of AED 10,000.
According to the conditions specified in the Cabinet Resolution No. (40) of 2017, a registrant can apply for Tax de-registration if: –
- The registrant stops making taxable supplies.
- The value of the taxable supply for 12 consecutive months is less than the Voluntary Registration Threshold of AED 187,500. The registrant must meet the condition specified in Clause (2) of Article (17) of this Decree-Law. An exception applies, if the total value of the taxable supply in next 30 days, will be more than the Voluntary Threshold Limit of AED 187,500.
For a VAT-registered company to De-register as per law, their taxable supply must consist of zero-rated supplies, imports or incur costs. Exempt or out-of-scope supplies are excluded from this; the total value of the taxable supply must also be less than AED 187,500 in the past 12 consecutive months.
The process of De-registration comprises of: –
- The application for De-registration needs to be done within 20 business days.
- All administrative penalties and due tax have been paid and tax returns have been filed.
- Once the application for de-registration has been approved, the registrant’s company will be de-registered from a date decided by the FTA or the last day of the tax period.
- Once the de-registration is complete, a notification will be sent to the registrant within 10 days after the application is approved.
De-registration can also be done online over the following steps: –
On your dashboard, click the ‘De-Register’ button on ‘De-registration status’.
- Input the reason for De-registration and the date from which you require it done.
- Provide other relevant information to support your application and click ‘Submit’.
- Once you have received the approval from FTA, you will be notified of the results accordingly.
VAT Experts at Executive Business Solutions are committed to providing the best VAT Advisory Service in the UAE to clients in compliance with the rules and regulations of VAT in the UAE having their international experience in Taxation. The Tax team at Executive Business Solutions is professionally equipped with relevant industry experience from different ends of the globe.