The deregistration of VAT means to cancel or terminate the vat registration. It is the law in Dubai to allow a taxpayer person or a business to suspend their tax registration number that is, (TRN). The federal tax authority (FTA) has the power to deregister from vat. VAT deregistration in Dubai is an online process. If a business fails to apply for deregistration in the assign time that is 20 days, so the late VAT deregistration penalty will be AED 10,000.The one who runs business in Dubai must know how to register or deregister VAT. Both are equally important. If the business or a person fails to follow the rules for deregistration for VAT. The FTA can impose penalties on such business or individual according to the of Dubai
Eligibility for VAT deregistration
According to the law of Dubai, the VAT registration or deregistration has a particular process to apply. And there some criteria for a business or a person to deregister.
- Mandatory VAT Deregistration
The business is eligible for deregistration, If it stops dealing taxable goods or services. According to the law and FTA of Dubai, it becomes mandatory to cancel registration. In Dubai, If the business’ expenses or taxable supplies from the past 12 months do not exceed the VAT deregistration threshold which is AED 187,500.
If the business falls under the criteria should never delay deregistering its VAT in Dubai to avoid the penalty.
- Voluntary VAT deregistration
This is another criteria for deregistration of VAT in Dubai. According to these criteria. If the business still deals with taxable goods and services. The company’s expenses were fewer then the mandatory VAT deregistration threshold for the past twelve months. And it has been more than 12 months since the company has registered as VAT under FTA rules in such a case a company can voluntary opt for VAT deregistration. There is no limit on the number of days to apply for deregistration process through FTA.
REASONS FOR VAT DEREGISTRATION
- If the business is not making any taxable supplies. So, it should be deregistered.
- If the company or business will not make a taxable supply in the future it should deregister.
- Conversion of business such as changing from sole proprietor to a company.
- If the business is disowned or sold.
- If the person or business want to join a group registration.
- If it was a member of a group registration and now the group no longer exists. So, the business or person should summit VAT deregistration form within 20 days.
HOW TO APPLY FOR VAT REGISTRATION
A business can apply by log in, to their VAT portals to complete its VAT deregistration. There are some steps involves in VAT deregistration.
- Sign in to your FAT VAT portal.
- On the dashboard, against the VAT registration, click the VAT deregistration button.
- Taxable business details are pre-population in the deregistration application.
- Reasons of VAT deregistration select from the list that on what basis you are deregistration for VAT.
- Effective date from which the taxable person is required to deregister depends on the basis of the deregistration.
- Upload all the relevant supporting documents by clicking on choose files.
- Review the form before to submit.