Mandatory and Voluntary Deregistration

Deregistration

Mandatory Deregistration

A taxable person must deregister if:

1. They stop making taxable supplies (e.g., business closure).
2. Their taxable supplies fall below AED 187,500 in the previous 12 months (below the voluntary registration threshold).

Voluntary Deregistration

A taxable person may voluntarily deregister if:

• Their taxable supplies have decreased and they no longer wish to be registered.
• The administrative burden of VAT compliance outweighs the input tax recovery benefit.

Notification Requirements

The taxable person must notify the FTA within 20 business days of the trigger event (e.g., cessation of business, or the end of the 12-month period in which supplies fell below the threshold).

What Triggers Mandatory Deregistration?

1. Business closure: The business ceases operations entirely.
2. Revenue decline: Taxable supplies fall below AED 187,500 over 12 consecutive months.
3. Change in activity: The business switches to exclusively exempt supplies.
4. Entity dissolution: The company is wound up or liquidated.

What Does NOT Trigger Deregistration?

• Temporary revenue dips (if the 12-month total still exceeds AED 187,500).
• Ownership changes (the business continues under new ownership).
• Relocation within the UAE (if the business continues making taxable supplies).