A UAE business must apply to deregister for VAT within 20 business days of stopping taxable supplies, or once its taxable turnover over the past 12 months falls below AED 187,500. Below AED 375,000 it may choose to deregister. Returns stay due until the FTA approves the application and the final return is filed.
When must a business deregister for VAT?
When it stops making taxable supplies and does not expect to make any in the next 12 months, or when taxable supplies over the past 12 months fall below the voluntary threshold of AED 187,500 and are not expected to exceed it in the next 30 days. The application is due within 20 business days of the event (Crowe UAE on VAT deregistration). The thresholds mirror the registration rules (Federal Tax Authority).
Can a business deregister voluntarily?
Yes, if taxable supplies are above AED 187,500 but below the mandatory AED 375,000 threshold (Crowe UAE). Whether it should depends on its customers: businesses selling to consumers or exempt buyers gain price room; those with large VAT-able costs lose input recovery.
What happens in the final VAT return?
Stock and assets on which input VAT was recovered are usually treated as a deemed supply and taxed in the final return. All outstanding VAT must be paid, or a refund claimed, before the FTA closes the registration (Crowe UAE). We reconcile the VAT account first, so nothing is left open.
What does late deregistration cost?
Historically AED 1,000, rising by AED 1,000 a month to a cap of AED 10,000 (Crowe UAE). The penalty schedule was reformed from 14 April 2026 (Al Tamimi summary of Cabinet Decision No. 129 of 2025), so we confirm the current figure against the decision before advising on a specific case. Returns also remain due while the application is outstanding.
Frequently asked questions
Does closing my licence deregister me for VAT?
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No. VAT deregistration is a separate application to the FTA on EmaraTax.
Do I still file returns after applying?
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Yes, until the FTA approves the deregistration and the final return is filed.
Should I deregister for corporate tax too?
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If the business is closing, yes: corporate tax has its own deregistration.
Sources
- VAT deregistration in the UAE — Crowe UAE. Checked 17 October 2026.
- Registration for VAT (mandatory and voluntary thresholds) — Federal Tax Authority. Checked 16 October 2026.
- UAE introduces comprehensive tax penalty reform, effective 14 April 2026 (Cabinet Decision No. 129 of 2025) — Al Tamimi & Company. Checked 16 October 2026.