VAT deregistration is mandatory when you stop making taxable supplies or your turnover falls below the voluntary threshold. You must apply within 20 business days of becoming eligible — and you cannot deregister with outstanding returns, which is why unfiled history so often controls the timeline.
When VAT deregistration UAE is required
- You cease making taxable supplies — the business has stopped trading or changed activity entirely
- Turnover falls below AED 187,500 over twelve consecutive months
- The company is being liquidated or otherwise closed
Where turnover falls between AED 187,500 and AED 375,000, deregistration is optional rather than mandatory — you may stay registered voluntarily if input recovery justifies the administration.
The 20 business day window is short and it runs from when you became eligible, not from when you noticed. Late application carries its own penalty.
What blocks deregistration
The FTA will not approve deregistration while obligations remain open. In practice that means:
- Every VAT return filed, including the final one
- All VAT and penalties paid
- A final return covering the period to the date of cessation
- Output tax accounted for on any assets retained at deregistration
That last point catches people. Where you claimed input tax on assets still held when you deregister, output tax may be due on them — you recovered VAT on the basis they would be used for taxable supplies, and that use has ended.
Deregistration when closing the company
If you are liquidating, VAT deregistration is one of several clearances required before the licence can be cancelled — alongside corporate tax deregistration, immigration, labour and utility clearances.
This is the step that most often extends liquidation timelines. A company that stopped trading two years ago but never filed cannot simply close: the missing returns have to be prepared first, sometimes alongside backlog accounting, before deregistration is even possible. Abandoning the licence does not end the obligation — see liquidation cost and timeline.
The process
- Confirm eligibility and the effective date of cessation
- File any outstanding returns, oldest first
- Prepare the final return to the cessation date, including any output tax on retained assets
- Settle liabilities including penalties
- Submit the deregistration application through EmaraTax
- Respond to FTA queries, which are common where filing history is incomplete
- Receive confirmation — keep it, as other authorities will ask for it
Records after deregistration
Deregistering does not end your record-keeping obligation. Records must be retained for the statutory period, and the FTA can review past periods within the limitation window.
Keep the deregistration confirmation, the final return and the supporting records together. Companies that discard everything on closure have no way to answer a later query — and failure to produce records is penalised in its own right.
Frequently asked questions
Within 20 business days of becoming eligible - typically when you cease taxable supplies or turnover falls below AED 187,500 over twelve months.
No. Every return must be filed and all liabilities settled, including a final return to the date of cessation.
Potentially. Where input tax was recovered on assets still held at deregistration, output tax may be due on them.
Deregistration is optional in that band. You may stay registered voluntarily if input recovery justifies the administration.
It depends almost entirely on your filing history. A clean record is straightforward; outstanding returns extend it considerably.
Yes. Retention obligations continue for the statutory period, and the FTA can review past periods within the limitation window.
Getting started
Send us your filing history and the date you ceased taxable supplies. If returns are outstanding, that is the work — deregistration itself is the easy part.