VAT deregistration in the UAE: thresholds, deadline and process

A UAE business must apply to deregister for VAT within 20 business days if it stops making taxable supplies, or if its taxable supplies fall below AED 187,500 over 12 months and are not expected to pass that level in the next 30 days. It may apply if supplies were below AED 375,000. The Federal Tax Authority (FTA) decides the application.

Key takeaways

• A registrant must deregister if it stops making taxable supplies, or if its supplies over 12 consecutive months are below AED 187,500 and not expected to exceed that in the next 30 days.
• A registrant may apply to deregister if its taxable supplies over the past 12 months were below AED 375,000; a voluntary registrant cannot do so within 12 months of registering.
• The application is due within 20 business days of the reason arising, and the business must pay all tax and penalties due and file its final return.
• Business assets are treated as supplied just before deregistration, so VAT can fall due on them in the final return.
• Applying late carries a penalty of AED 1,000, repeated monthly up to AED 10,000, and deregistering does not cancel tax or penalties already due.

On this page 10 sections

When must or may a business deregister?

VAT registration is not permanent. Federal Decree-Law No. 8 of 2017 on VAT (the Decree-Law) sets out when a registrant has to leave the VAT system and when it may choose to. Two thresholds drive the rules: AED 187,500, the voluntary registration threshold, and AED 375,000, the mandatory registration threshold. Both are explained in the guide to VAT registration in the UAE.

When to deregister

Must deregister below AED 187,500; may deregister below AED 375,000

A VAT registrant must apply to deregister if it stops making taxable supplies, or if its taxable supplies over 12 consecutive months are less than the voluntary threshold of AED 187,500 and its taxable supplies or taxable expenses are not expected to exceed that threshold in the next 30 days; it may apply if its taxable supplies over the past 12 months were less than the mandatory threshold of AED 375,000.

The table summarises the three situations. The first two are duties; the third is a choice.

Source: Federal Decree-Law No. 8 of 2017 on VAT, Articles 21 and 22 (Federal Tax Authority), checked 21 Oct 2026.

Compulsory deregistration

Article 21 of the Decree-Law covers the two cases in which a registrant must apply. The first is simple: the business no longer makes taxable supplies, for example because it has closed or its licence has been cancelled. The second is a fall in turnover. Taxable supplies over 12 consecutive months are below AED 187,500, and neither supplies nor taxable expenses are expected to exceed AED 187,500 in the next 30 days.

The forward-looking test matters. A business whose supplies or taxable expenses are expected to pass AED 187,500 in the next 30 days does not have to deregister, even if the past 12 months were quiet. If a registrant does not apply when it should, the FTA can deregister it once it is satisfied that the conditions are met (Executive Regulation, Article 14).

Optional deregistration and the 12-month lock

Article 22 lets a registrant apply to deregister when its taxable supplies over the past 12 months were below AED 375,000. This route can suit a business that registered expecting to cross the mandatory threshold but did not, or whose turnover has since fallen. The FTA decides whether to approve the application.

There is one restriction. A voluntary registrant cannot apply to deregister within 12 months of registering (Decree-Law, Article 23). If the FTA approves an application, deregistration runs from the date requested in the application, from the application date if none was given, or from another date the FTA sets (Executive Regulation, Article 14).

The 20-business-day deadline and how to apply

Deadline to apply

20 Business Days

A registrant must apply to the FTA to deregister within 20 business days of a deregistration case arising, and on applying must pay all tax and administrative penalties due and file its final tax return.

The clock starts when the reason arises, not when the business gets round to it. For a business that stops trading, that is the point at which it stops making taxable supplies.

The application is made on EmaraTax, the FTA’s online portal. The business opens its taxable person account and, under VAT, chooses “Actions” and then “De-Register”. The service is free, and the FTA estimates 30 business days to complete it. The documents needed depend on the reason: for example a licence cancellation certificate or liquidation letter, a turnover template from the date of registration, or a signed declaration that taxable supplies will not pass the threshold in the next 30 days.

Before you apply

• File every outstanding VAT return and pay any VAT due; the VAT return filing guide covers periods and deadlines.
• Pay any administrative penalties already assessed.
• Work out which reason applies, so that the right supporting documents are ready.

Assets and the final return

Deregistration is not a clean break for tax already incurred. On applying, the business must pay all tax and administrative penalties due and file its final tax return. Business assets are treated as supplied just before deregistration, and the VAT on them goes in that final return. In practice, stock, equipment and other assets may therefore bring a final VAT charge, so it is worth listing them before the application. How the supply is valued and which assets are caught is set out in the Executive Regulation; check the current text, or take advice, before filing.

Deregistering also does not cancel tax or penalties already due. They stay payable after the registration ends.

Penalty for late deregistration

Late deregistration penalty

AED 1,000, then monthly, up to AED 10,000

A registrant that fails to submit a deregistration application within the timeframe in the tax law is penalised AED 1,000 for the late submission and the same amount on the same date each month, up to a maximum of AED 10,000.

The penalty is a fixed amount, not a percentage of tax, so it is avoided by applying within the deadline. A registrant that no longer meets the test also stays on the register, with its return obligations, until the application is made and approved.

After deregistration

From the effective date the business is no longer a VAT registrant. A business that is not registered cannot charge VAT or show VAT on invoices; see the guide to tax invoice requirements for what a valid VAT invoice must contain while a business is registered. It also stops recovering input VAT on later purchases, so VAT paid on costs becomes a cost of the business. Customer pricing may need to be reviewed as a result.

Deregistration does not keep the business out of VAT for good. The registration rules still apply: a business whose taxable supplies exceeded AED 375,000 over the previous 12 months, or are expected to in the next 30 days, must register. A business that expects to be close to that level should keep a running record of turnover, as set out in the registration guide. The VAT rates guide explains which supplies are standard-rated, zero-rated or exempt.

Where to go next

Deregistration is one end of the VAT lifecycle. The start is covered in how to register for VAT, and the middle in filing a VAT return. Registered businesses should also understand the reverse charge and e-invoicing, which are relevant while a business stays on the register. All published guides are listed on the VAT and excise guides page.