VAT Deregistration
VAT (Value Added Tax) deregistration is a formal process by which a business voluntarily cancels its VAT registration with the tax authorities. This can occur for various reasons, such as ceasing trading activities, changes in business structure, or if the business’s taxable turnover falls below the mandatory registration threshold. Additionally, businesses in Dubai, UAE, can rely on expert assistance for VAT Accounting & Audit, ensuring compliance throughout the deregistration process. Trust our seasoned professionals for comprehensive VAT solutions tailored to your needs. Here’s an overview of the VAT deregistration process
Why choose Inchub ?
Ceasing Business Operations
Ceasing Business Operations
If a business ceases its trading activities or closes down, it may choose to deregister for VAT.
Below Threshold Turnover
Below Threshold Turnover
If a business's taxable turnover falls below the mandatory registration threshold, it may qualify for deregistration.
Change in Ownership
Change in Ownership
In cases where there is a change in ownership that results in a new legal entity, the existing entity may deregister for VAT.
Change in Business Structure
Change in Business Structure
Changes in the legal structure of a business, such as mergers, demergers, or conversions, may trigger the need for VAT deregistration.
Selling or Transferring a Business
Selling or Transferring a Business
When selling or transferring a business as a going concern, VAT deregistration for the seller may be necessary.
VAT Deregistration Process
Eligibility Check
The business must assess its eligibility for VAT deregistration based on the specific criteria outlined by the tax authorities. This includes ensuring that there are no outstanding VAT liabilities.
1
Notification to Tax Authorities
The business must formally notify the tax authorities of its intention to deregister for VAT. This is typically done through a specific application or form provided by the tax authority.
2
Submission of Supporting Documents
Depending on the reason for deregistration, the business may be required to submit supporting documents, such as financial statements, evidence of ceasing trading, or details of the change in business structure.
3
Settling Outstanding Liabilities
Before deregistration is approved, the business must settle any outstanding VAT liabilities, including submitting any final VAT returns and making payments.
4
Confirmation of Deregistration
Once the tax authorities review the application and supporting documents, they will confirm the deregistration and update the business’s status accordingly.
5
Confirmation of Deregistration
The business may need to make adjustments for any input tax recovery or repayments related to assets on hand at the time of deregistration. Final VAT returns may also be required.
6
Cancellation of VAT Registration Number
Upon successful deregistration, the tax authorities will cancel the business’s VAT registration number, and the business is no longer obligated to charge or collect VAT.
7
VAT Deregistration Process
-
TimingThe business should carefully time the deregistration process to align with its business activities and ensure a smooth transition.
-
Professional AdviceSeeking professional advice from tax consultants or accountants is recommended to navigate the complexities of the deregistration process and ensure compliance with regulations.
In a Nutshell
VAT deregistration is a formal process that businesses should approach with diligence, ensuring all necessary steps are followed to comply with tax regulations and avoid potential issues.
