Registered dealer can make an application for deregistration within 20 days if any of the specified condition is fulfilled. Article 21 of the Decree-law and article 14 of the Executive regulation states the procedures for tax de-registration.
Conditions for deregistration:
- Stop making supplies or does not intend to make supplies over the next 12 months period.
- Value of supplies or taxable expenses incurred by the registrant over previous 12 months is less than AED 187,500 and the authority is satisfied that supplies or taxable expenses (together with last 12 months figures) are not expected to exceed AED 187,500 in next 30 days.
Date of cancellation:
- When the registrant applies for cancellation/de-registration:
With effect from the last day of the tax period during which the above conditions are fulfilled or any other date.
For example: suppose a person has a tax period from 2nd February 2018 to 31st march 2018 then he can deregister only after 31st march 2018.
- When authority de-register without receiving an application from registrant (deemed cancellation/de-registration):
With effect from the last day of the tax period when the authority is satisfied that conditions are satisfied or from any other date.
Pre-requirement for deregistration/cancellation:
Registrant shall not be deregistered only after payment of all taxes, administrative, penalties, and filing all tax returns.
Goods in hand as on date of deregistration/cancellation:
Goods or services forming part of asset i.e held in hand shall be treated as deemed supply. Due tax of same shall become payable and will form part of taxable supply in the final tax return.
For example: If a person wants to de register for VAT. But he has a value of the stock on the date as AED 195,000. Then first he will pay 5% VAT on AED 195,000 then he can deregister.
Date of deregistration:
The date requested by the registrant or the date on which the request is made.
Communication of deregistration/cancellation:
Within 10 business days of making the decision.
The entire contents of this article is solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation.. It doesn't constitute professional advice or a formal recommendation. The author has undertook utmost care to disseminate the true and correct view and doesn't accept liability for any errors or omissions. You are kindly requested to verify & confirm the updates from the genuine sources before acting on any of the information's provided herein above.