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VAT De-registration is a process of canceling the existing VAT registration. A Registrant needs to de-register under following cases as specified under Article (21) of the said decree law. UAE VAT law specifies the circumstances to apply for De-registration. As a consequent of De-registration a registered taxable person becomes an unregistered person such person need not to comply with the said decree law. Such person needs to keep track of the turnover reached which is specified under said decree law to register under VAT again.
UAE VAT law has specified conditions under which one must or may apply for De-registration under Article (21):-
- If a person stops making taxable supplies or ceases the existing business.
- If the value of taxable supplies made over a period of past 12 consecutive months is less than the limit specified for voluntary registration i e, 187,500 AED and such limit of voluntary registration is not expected to cross in next coming 30 days.
Such person need to file an application with FTA for de-registration with in next 20 business days
As a noncompliance for such de-registration a penalty of 10,000 AED will be levied on such person.
The said person will have pay all the due liabilities of VAT taxes and administrative penalties(if any) with FTA to proceed with the process of De-registration and avoid the penalty of 10,000 AED. Until and unless a person clears his/her dues with FTA he will not be de-registered with FTA.