VAT deregistration is mandatory when your taxable supplies fall below AED 187,500 for 12 consecutive months, or when you cease taxable activity. Voluntary deregistration is allowed when supplies stay between AED 187.5K and AED 375K. File via EmaraTax within 20 working days of becoming eligible. Final return covers up to deregistration date.
When deregistration is mandatory
- Taxable supplies below AED 187,500 for 12 consecutive months
- Business ceases trading entirely
- Business changes form (e.g., LLC dissolved, sole establishment closed)
- Death of sole establishment owner (estate handles deregistration)
- Failure to deregister within 20 working days = AED 10,000 penalty
When voluntary deregistration is allowed
You can deregister voluntarily if all are true:
- Supplies have fallen below AED 375,000 (mandatory threshold)
- Supplies are still above AED 187,500 (haven’t hit mandatory dereg)
- You don’t expect to cross AED 375K in next 30 days
Deregistration process on EmaraTax
Confirm eligibility
Check past 12 months of taxable supplies. If under AED 187.5K → mandatory; AED 187.5K–375K → voluntary.
File deregistration request on EmaraTax
Login → Taxable Person → Request VAT Deregistration. Reason: business closed / below threshold / change of legal form.
Submit closing-period filings
File any pending VAT 201 returns and pay outstanding balances before submission.
Asset adjustment
Output VAT due on inventory and capital assets held at deregistration date — calculated and paid.
Receive deregistration approval
FTA reviews and confirms; TRN officially cancelled. Most clean cases close in 30-60 days.
Closing-period VAT obligations
At deregistration, FTA treats you as having made a ‘deemed supply’ of any:
- Inventory still held — output VAT on market value
- Fixed assets still held (where input VAT was claimed) — output VAT on book value
- Capital assets under article 58 adjustments — additional output VAT possible
- Last regular return covering activity to deregistration date
Closing-period output VAT can surprise — a deregistering trading company with AED 800K of inventory pays AED 40K of output VAT. Plan inventory wind-down before deregistration.
Life after deregistration
- Stop charging VAT on any supplies from deregistration date
- Update invoice templates to remove TRN
- Retain records for 5 years (the obligation survives deregistration)
- Handle pending refund claims — file via VAT 311 standalone form within 5-year window
- Re-register if circumstances change — same EmaraTax process
Plan a clean deregistration
We handle final returns, inventory adjustments, and TRN cancellation cleanly. Plus advise on optimal timing to minimise closing-VAT.
Frequently asked questions
When is VAT deregistration mandatory?
When taxable supplies fall below AED 187,500 for 12 consecutive months, or when business ceases. File within 20 working days of becoming eligible.
What happens if I don't deregister?
AED 10,000 penalty for failing to file within 20 days. You also continue to be liable for VAT 201 filings — late-filing penalties accrue.
Do I owe VAT at deregistration?
Yes, on inventory and fixed assets held at deregistration date (where input VAT was previously claimed). Calculated as a ‘deemed supply’.
How long does deregistration take?
30-60 days typically. Larger businesses with complex closing positions can take 90+ days. Tracked on EmaraTax.
Can I re-register later?
Yes. If circumstances change and you cross thresholds again, register through the same EmaraTax flow. New TRN issued.
What about pending refunds?
File standalone VAT 311 within 5 years of the period in which input VAT arose. Retention obligation continues.
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