VAT Deregistration in the UAE: When and How
You must apply to deregister for VAT within 20 business days if you stop making taxable supplies, or your taxable turnover over 12 months falls below AED 187,500. Here is when deregistration is mandatory, when it is optional, and how to do it on EmaraTax.
Deregistration is the step businesses forget. When a company winds down or its turnover drops, owners often stop thinking about VAT — but you remain registered, and liable, until the FTA approves your deregistration. Miss the window and there is a penalty. This guide covers when you must deregister, when you may, and the process.
When must you deregister?
Under Article 21 of the VAT law, deregistration is mandatory in two cases:
- You stop making taxable supplies altogether (for example, you cease trading), or
- The value of your taxable supplies over the past 12 months falls below the voluntary registration threshold of AED 187,500, and you do not expect to exceed it.
Note the threshold: mandatory deregistration is tied to the AED 187,500 voluntary threshold, not the AED 375,000 registration figure — a point the FTA's plain-language guidance sometimes blurs. If either trigger applies, you must act.
When can you deregister voluntarily?
Under Article 22, deregistration is optional when your taxable supplies over the past 12 months fell below the mandatory registration threshold of AED 375,000 (but you are not below AED 187,500 and are not required to deregister). In other words, between AED 187,500 and AED 375,000 of turnover you may choose to deregister; below AED 187,500 you generally must. Whether voluntary deregistration is worthwhile depends on your input-VAT position — if you regularly recover VAT on costs, staying registered can be an advantage.
The 20-business-day deadline
Once a deregistration obligation arises, you must apply within 20 business days. Miss it and the penalty is AED 1,000, repeating monthly up to a maximum of AED 10,000. So deregistration is not something to leave until the accounts are tidied up months later — the clock starts when the trigger happens.
How to deregister on EmaraTax
Deregistration is free and done on EmaraTax:
- Log in and open your VAT registration under the correct taxable person.
- Choose the deregister action and give the reason (ceased supplies, or turnover below threshold) and the effective date.
- Submit the application and any supporting information.
- File your final VAT return and settle any tax due — the final return is due within 28 days of the deregistration effective date.
- Wait for FTA approval. Keep charging, filing and paying VAT until the FTA approves — deregistering does not switch off your obligations, and stopping early is itself a breach.
Common deregistration mistakes
- Assuming it is automatic. Closing the business does not end your VAT registration; you must apply.
- Missing the 20-business-day window. The penalty accrues monthly — apply as soon as the trigger occurs.
- Stopping VAT too early. Until approval, you still charge, file and pay. A gap between "we stopped" and FTA approval creates unfiled periods.
- Confusing the thresholds. Mandatory deregistration is the AED 187,500 line; voluntary is available below AED 375,000. The registration rules run the same thresholds in reverse — see our VAT registration and filing guide.
How QuickTax helps
We watch your turnover both ways — so you register when you must and deregister when you should — file the final return correctly, and keep everything running until the FTA signs off, so no penalty creeps in during the wind-down.
See how our accounting and tax service works →
This material is for reference and is not tax advice. Always verify current requirements on the official resources of the FTA and the UAE Ministry of Finance.
What this means for you
Deregistration is the step people forget — and the FTA penalises the delay. Three things to act on:
Two triggers, one threshold to watch
Deregister if you stop making taxable supplies, or if 12-month taxable turnover falls below AED 187,500. Between AED 187,500 and AED 375,000 you may deregister voluntarily.
Apply within 20 business days
The clock starts when the trigger occurs, and the penalty is AED 1,000 a month up to AED 10,000. Do not wait until year-end housekeeping.
Keep running until approved
Charge, file and pay VAT until the FTA signs off, and file a final return within 28 days of the effective date. Deregistering is not automatic on closing the business.
Frequently asked questions
When is VAT deregistration mandatory in the UAE?
You must deregister if you stop making taxable supplies, or if your taxable supplies over the past 12 months fall below the voluntary threshold of AED 187,500 and you do not expect to exceed it. This mandatory trigger is tied to the AED 187,500 figure, not the AED 375,000 registration threshold — a common point of confusion.
How long do I have to apply for VAT deregistration?
You must apply within 20 business days of the deregistration obligation arising. The FTA also aims to process the application within 20 business days. Because the deadline runs from when the trigger occurs, apply as soon as you cease supplies or drop below the threshold.
What is the penalty for late VAT deregistration?
Late deregistration is penalised at AED 1,000, repeating monthly up to a maximum of AED 10,000. The old flat AED 10,000 figure is outdated — the current structure is AED 1,000 per month, capped. Applying on time avoids it entirely.
Do I stop charging VAT once I apply to deregister?
No. You must keep charging, filing and paying VAT until the FTA approves your deregistration. Stopping early creates unfiled periods and is itself a breach. You also file a final VAT return within 28 days of the deregistration effective date.