VAT deregistration in the UAE is not automatic: the Federal Tax Authority removes you from the tax register only after an application is submitted, and once you stop making taxable supplies you have 20 business days to apply. Missing the window is a penalty, not an oversight.
TL;DR
- Mandatory deregistration: a registered business must apply within 20 business days of ceasing to make taxable supplies, under Article 26 of Federal Decree-Law No. 8 of 2017.
- Voluntary deregistration is available where the value of taxable supplies in the preceding 12 months fell below AED 187,500.
- Applications are made through the FTA's EmaraTax portal; outstanding returns and payments must be settled before the FTA approves.
- Late deregistration penalties run at AED 1,000 per month, capped at AED 10,000, under Cabinet Decision No. 40 of 2017 (as amended).
- The final tax period ends on the deregistration date, and the final return is due within 28 days.
When must a business deregister for VAT?
Deregistration comes in two forms, and the obligations are different:
Mandatory — business ceased
- Trigger: Registered person stops making taxable supplies
- Deadline: Apply within 20 business days from the date of cessation
- Reference: Article 26, Federal Decree-Law No. 8 of 2017
Mandatory — supplies expected to stop
- Trigger: No taxable supplies expected in the next 12 months, and supplies in the preceding 12 months were below AED 187,500
- Deadline: Apply within 20 business days from the date that expectation arises
- Reference: Article 26, Federal Decree-Law No. 8 of 2017
Voluntary
- Trigger: Taxable supplies in the preceding 12 months fell below AED 187,500
- Deadline: Optional — apply when it suits the business
- Reference: Article 27, Federal Decree-Law No. 8 of 2017
The 20-business-day clock is the one most businesses miss. It runs from the date of cessation — not from the end of the financial year, not from the last VAT return, and not from the date you remember to deal with it.
Step 1 — Confirm deregistration actually applies to you
A common mistake is deregistering a dormant-seeming business that still makes taxable supplies. Bank interest, a single consultancy invoice, or rental income from a commercial unit are all taxable supplies that keep you in the VAT system. Before applying, list every income stream for the last 12 months and the next 12 months. If any of them are taxable, deregistration is premature — and the FTA can reject the application and impose penalties for incorrect requests.
Also note that deregistering does not erase your past: you remain liable for VAT on supplies made before deregistration, and the FTA keeps its full audit rights over the registered period.
Step 2 — Close out your VAT obligations first
The FTA will not approve a deregistration while obligations are open. Before you apply:
- File the return covering the period in which you stopped making taxable supplies, if it is due.
- Pay any outstanding VAT and administrative penalties on your EmaraTax account.
- Prepare for a final tax period: the tax period ends on the deregistration date, and the final return is due within 28 days after the period ends, under the Executive Regulations.
- Keep your records. VAT records must be retained for at least five years after the end of the tax period — and after deregistration the obligation continues for the periods you were registered.
If you are unsure what an FTA review of your registered period would surface, our guide on preparing for an FTA VAT audit covers the document set auditors request.
Step 3 — Apply on EmaraTax
- Log in to EmaraTax and open your VAT Taxable Person profile.
- Select the option to request deregistration and choose the reason — cessation of business, expected 12-month stoppage, or voluntary below-threshold deregistration.
- Enter the effective date and confirm the details of the business and its authorised signatory.
- Submit and monitor your EmaraTax inbox — the FTA may request supporting documents, such as a trade licence cancellation or an explanation of the cessation.
Processing time is not fixed by the FTA; most straightforward applications are actioned within a few weeks. Approval is confirmed through EmaraTax, and your TRN stops being valid for invoicing from the deregistration date.
What changes after deregistration
- You must not charge VAT or issue tax invoices after the deregistration date.
- Input VAT on costs related to assets you still hold can trigger a clawback: where capital assets within the recovery period are still held at deregistration, an output tax adjustment applies under the Executive Regulations.
- Inventory and assets used in the business can constitute a deemed supply at deregistration where input VAT was recovered on them.
- Records remain open to FTA inspection for the retention period.
The penalty for missing the window
Under Cabinet Decision No. 40 of 2017 (as amended), the failure of a registrant to submit a deregistration application within the timeframe specified in the Tax Law carries an administrative penalty of AED 1,000 for late submission, charged on the same date monthly, up to a maximum of AED 10,000. Filing late VAT returns for the periods before cessation carries its own penalties, so tidy the ledger before you deregister, not after.
Do not forget corporate tax deregistration
VAT and corporate tax are separate registers. A business that ceases to exist also needs to deregister for corporate tax — Article 52 of Federal Decree-Law No. 47 of 2022 requires the application within three months of the date of cessation, and late deregistration penalties under Cabinet Decision No. 75 of 2023 run at AED 1,000 per month, capped at AED 10,000. Closing the VAT account does not close the corporate tax one.
How Finanshels handles this
We wind down VAT positions properly: final returns, deemed-supply checks, the EmaraTax application and the corporate tax deregistration alongside it. If your business is ceasing or restructuring, book a free consultation and we will run the whole shutdown cleanly.
Related VAT deregistration terms
A few concepts sit next to deregistration: a deemed supply is inventory or assets you still hold at deregistration on which input VAT was recovered, potentially triggering output tax; the capital assets scheme governs the clawback adjustment on qualifying capital assets still held within their recovery period; a Tax Registration Number (TRN) stops being valid for invoicing the moment deregistration takes effect; and the final tax period is the short period between your last normal period end and the deregistration date, with its own 28-day return deadline.
FAQs
How long do I have to deregister for VAT after closing my business?
20 business days from the date you stop making taxable supplies, per Article 26 of Federal Decree-Law No. 8 of 2017. The penalty for missing it is AED 1,000 per month, capped at AED 10,000.
Can I deregister for VAT voluntarily in the UAE?
Yes, if the value of your taxable supplies in the preceding 12 months was below AED 187,500, under Article 27 of Federal Decree-Law No. 8 of 2017. The application is voluntary and made through EmaraTax.
Do I still have to file a VAT return after deregistering?
Yes — the tax period ends on the deregistration date, and a final return covering that period is due within 28 days after the period ends. Any VAT due must be paid before the account is considered closed.
Is VAT deregistration the same as corporate tax deregistration?
No. They are separate applications on separate registers. Corporate tax deregistration under Article 52 of Federal Decree-Law No. 47 of 2022 is due within three months of cessation, with its own penalty ladder.
Last reviewed: September 2026 by Gautam Sanoj, Associate Manager – Tax Advisory, Finanshels. Rules as of Federal Decree-Law No. 8 of 2017, Cabinet Decision No. 40 of 2017 (as amended) and Federal Decree-Law No. 47 of 2022; verify current requirements against the FTA (tax.gov.ae) before acting.
