Deregistering for VAT in the UAE costs AED 0 in official fees — the Federal Tax Authority (FTA) charges nothing to apply. The real costs sit around the application: an administrative penalty of AED 1,000 per month of delay, capped at AED 10,000, if you apply late; the final VAT return and any tax you still owe; and optional professional fees if you use an agent. Applied on time with clean books, deregistration is free.
TL;DR
- The FTA charges no fee for a VAT deregistration application.
- Applying late costs AED 1,000 charged on the same date each month, up to a cap of AED 10,000.
- You must apply within 20 business days of ceasing to make taxable supplies, or of eligibility on the turnover test.
- The final return and outstanding tax must be settled before deregistration is approved.
- Professional fees are optional and vary by provider — there is no fixed official tariff.
What actually triggers the cost
VAT deregistration has two routes, and both carry the same deadline discipline:
- Mandatory — the business has ceased making taxable supplies, or its taxable supplies and imports in any 12-month period fell below AED 187,500. Article 22 of Federal Decree-Law No. 8 of 2017 (the VAT Law) requires the application within 20 business days of the trigger.
- Voluntary — turnover has been below AED 375,000 for 12 consecutive months and the registrant wants to exit the regime. The FTA approves deregistration only after you have filed the final VAT return and settled every dirham of tax and penalties outstanding. That settlement — not the application — is usually the largest line on the real bill.
The full cost breakdown
| Cost item | When it applies | Amount | Source |
|---|---|---|---|
| Deregistration application fee | Always | AED 0 | FTA — no fee is charged for the service |
| Late-application penalty | Application later than 20 business days after eligibility | AED 1,000 charged on the same date each month of delay, capped at AED 10,000 | Cabinet Decision No. 40 of 2017 on administrative penalties, as amended |
| Final VAT return | Before deregistration is approved | Tax due on the final period; late filing carries its own penalties | VAT Law, Arts. 25–26; Tax Procedures Law penalty schedule |
| Outstanding tax and penalties | Before approval is granted | Whatever the assessment shows | FTA deregistration conditions |
| Professional agent fees | Optional | Varies by provider and complexity | No official tariff |
Two penalty clocks run independently. The deregistration penalty punishes the late application. Filing the final return late — or paying late — draws the separate penalties that apply to any return or payment, and they are not absorbed by the AED 10,000 cap.
What deregistration does not cost you
Three things people expect to pay for, and do not:
- The EmaraTax application itself is free regardless of whether the request is mandatory or voluntary.
- Cancellation of an existing TRN carries no charge — the penalty regime only bites when the application is late.
- A minimum balance or settlement of zero — if the final return shows a refund position, the FTA owes you, and that refund follows the standard VAT refund process after deregistration. The cost that surprises businesses is rarely the deregistration itself. It is the discovery, mid-application, that two years of returns were filed with errors — because input tax recovery is re-checked at closure. If your books are not tidy, the guide to how to deregister for VAT in the UAE walks through the full process and documentation before any money moves.
The late penalty, in practice
The penalty accrues monthly on the same date: AED 1,000 when the application is one month late, and the same AED 1,000 again on that date every further month, up to the AED 10,000 cap — reached after ten months. It applies even if the business owes no VAT at all; it is a penalty for the procedural failure to deregister on time. A worked example: a company ceases trading on 1 January 2026 and applies for deregistration on 1 August 2026 — about six months late. The exposure is roughly AED 6,000, on top of any final-return liabilities.
Deregister or keep the registration?
Not every dormant business should deregister. If the company will restart taxable activity within a year, keeping the TRN avoids re-registration and preserves the right to recover input tax on setup costs. If the business is genuinely finished — licence cancelled, assets sold — deregistering stops the obligation to file nil returns and closes the audit window on fresh filings. The choice is operational, not financial: both routes are free, and only the deadline makes either one expensive.
Common questions, answered with the rules
Is there an FTA fee for VAT deregistration?
No. The application on EmaraTax is free of charge, mandatory and voluntary alike.
What is the penalty for deregistering late?
AED 1,000 charged on the same date each month of delay, capped at AED 10,000, under Cabinet Decision No. 40 of 2017 (as amended). It applies from 20 business days after the trigger event.
Do I have to file a final VAT return?
Yes. Deregistration is approved only after the final return for the last tax period is filed and all tax and penalties are settled.
Can I get a VAT refund after deregistering?
Yes. If the final position is a refund, it is processed through the standard VAT refund channel even after the TRN is cancelled.
How long does deregistration take?
The FTA processes complete applications within up to 20 business days, and approval is conditional on the final return and settlement being complete.
FAQ
How much does VAT deregistration cost in the UAE?
The FTA charges no fee for the application. The only mandatory costs are the final return and any outstanding tax; late applications draw a penalty of AED 1,000 charged monthly to a maximum of AED 10,000, under Cabinet Decision No. 40 of 2017 as amended.
When must I apply for VAT deregistration?
Within 20 business days of ceasing to make taxable supplies, or of falling below the AED 187,500 threshold for 12 months.
What is the penalty for late VAT deregistration?
AED 1,000 charged on the same date each month of delay, up to a maximum of AED 10,000, under Cabinet Decision No. 40 of 2017 as amended.
Do I need an agent to deregister for VAT?
No — the application is free and can be filed directly on EmaraTax. Agents are optional and their fees vary by provider.
Can I keep my VAT registration if my business is dormant?
Yes, as long as you continue filing returns. Deregistration is only mandatory once taxable supplies cease or 12-month turnover falls below AED 187,500.
One last thing
Deregistration is one of the few VAT procedures where doing nothing is the most expensive option: the application is free, the process is defined, and the penalty exists solely to punish delay. Apply inside the 20-business-day window with the final return ready, and the total official cost is zero. If your books need cleaning before the final return, talk to Finanshels — Finanshels is an FTA Registered Tax Agency handling VAT deregistration, final returns and closures across the UAE.
