Once your company stops making taxable supplies — or its turnover falls below AED 187,500 — you have 20 business days to apply for VAT deregistration on EmaraTax. Missing that window costs AED 1,000, plus AED 1,000 for each further month of delay, capped at AED 10,000.
It is the most commonly missed step in a company closure, because founders assume the VAT registration dies with the license. It does not: the TRN stays live, returns stay due, and late-filing penalties stack on a company that no longer trades. Amary files the deregistration, the final return and the settlement as one package — and handles the license cancellation and corporate tax deregistration alongside when you are closing for good.
Who must — and who may — deregister
| Situation (AED, 12-month taxable turnover) | Deregistration |
|---|---|
| Business ceased making taxable supplies | Mandatory — within 20 business days |
| Turnover below 187,500 and not expected to recover | Mandatory — within 20 business days |
| Turnover between 187,500 and 375,000 | Optional — your call, run the numbers first |
| Company being liquidated | Mandatory, coordinated with the closure file |
Deregistering voluntarily is not always smart: lose the TRN and you also lose the right to recover input VAT on your costs. If your dip in turnover is temporary, staying registered may be worth more than the compliance it costs. We model both scenarios before filing anything.
The process, and where it goes wrong
- Application on EmaraTax, stating the ground (cessation or threshold) with evidence — financials, liquidation resolution or trade license status.
- FTA review. The authority approves a pre-deregistration status and sets your final tax period.
- Final VAT return covering everything up to the effective date — including VAT on the sale of assets and stock on hand, the line almost everyone forgets: business assets kept or disposed of on exit are a deemed supply.
- Settle the balance — the TRN is only cancelled once every return is filed and every dirham of tax and penalties is paid.
The classic failure mode: applying, assuming it is done, and ignoring EmaraTax while a final return quietly falls overdue. Deregistration is approved at the end of the sequence, not the start.
What Amary does
Eligibility check with the turnover evidence the FTA expects, the application itself, the final return (deemed supplies included), penalty review — and a reconsideration request if you already picked up a late-deregistration fine with a defensible cause. Fixed fee, quoted in writing, whether the deregistration is stand-alone or part of a full closure.
Turnover below the threshold, or closing down? Send us your TRN and last four returns: we will confirm whether deregistration is mandatory, optional or premature — in writing, within one business day, before you commit to anything.
Frequently asked questions
When does the 20-business-day clock start?
On the date the triggering event happens — the day you cease taxable supplies or the day the 12-month turnover drops below AED 187,500 — not the day you get around to telling the FTA.
What is the penalty for late VAT deregistration?
AED 1,000 immediately, plus AED 1,000 per additional month of delay, capped at AED 10,000. Any late final returns carry their own separate fines on top.
Can I deregister with unpaid VAT or open penalties?
No. The FTA cancels the TRN only after all returns are filed and all amounts settled. A payment plan can be negotiated for a large balance — we have done it.
Do I still file returns while the application is pending?
Yes. Every return that falls due before the FTA confirms your final period must be filed on time, even nil returns.
Is VAT deregistration enough if I am closing the company?
No — corporate tax deregistration is a separate application with a 3-month deadline, and the license itself must be cancelled with your licensing authority. The three run in a specific order; we run them as one file.