Post-Deregistration Obligations

Post-Deregistration Obligations

Even after a business deregisters from VAT, certain obligations continue.

Record Retention

• General records: Must be retained for 5 years from the end of the tax period to which they relate.
• Real estate records: Must be retained for 15 years.
• The FTA can audit records from periods when the business was registered, even after deregistration.

FTA Audit Rights

The FTA retains the right to audit a deregistered business for tax periods when it was registered. This means:

• The business must make records available upon FTA request.
• The FTA can issue assessments for underpaid VAT during registered periods.
• Penalties may still apply for violations discovered after deregistration.

Re-Registration

If a deregistered business resumes making taxable supplies:

• It must re-register if it meets the mandatory threshold (AED 375,000).
• It may voluntarily re-register if it meets the voluntary threshold (AED 187,500).
• A new TRN will be issued (or the old one may be reactivated, at the FTA's discretion).
• The business must wait for FTA approval before charging VAT again.

Outstanding Liabilities

Any VAT liabilities (unpaid tax, penalties) that existed at the time of deregistration remain payable. The FTA can pursue collection even after deregistration.

Outstanding Refunds

If the business was owed a VAT refund at the time of deregistration:

• The refund should be claimed in the final VAT return.
• The FTA will process the refund after verifying the final return.
• Large refunds may be subject to audit before payment.

Transfer of Business

If the business is sold as a going concern (TOGC):

• The seller deregisters (or the buyer inherits the TRN).
• The transfer is outside the scope of VAT (covered in Module 21).
• The buyer must be a registered taxable person.