A business must apply for VAT deregistration once it stops making taxable supplies, or once its taxable supplies over the preceding 12 months fall below AED 187,500 — the mandatory threshold. A business may also apply to deregister voluntarily once taxable supplies fall below AED 375,000, provided they remain at or above AED 187,500.
This guide covers both routes, the 20-business-day deadline, the actual penalty structure for missing it, and the two obligations — a final return and the deemed disposal of remaining business assets — that most guides to this topic leave out.
Mandatory vs Voluntary Deregistration
| Route | Trigger | Your Position |
| Mandatory | Taxable supplies over the preceding 12 months fall below AED 187,500, or the business stops making taxable supplies altogether | You must apply within 20 business days |
| Voluntary | Taxable supplies over the preceding 12 months fall below AED 375,000 but remain at or above AED 187,500 | You may apply — it is not required |
“Taxable supplies” means standard-rated and zero-rated supplies over a rolling 12-month window — not a calendar or financial year, and not total revenue. Exempt supplies do not count toward either threshold.
Two Conditions Worth Knowing Before You Apply
- The 12-month bar on voluntary registrants. If you registered for VAT voluntarily, you cannot apply to deregister within 12 months of your registration date — even if your supplies have since fallen below the threshold.
- The 30-day exception to mandatory deregistration. If your taxable supplies have fallen below AED 187,500 but you expect them — or your taxable expenses — to rise back above AED 187,500 within the next 30 days, you are not required to deregister. In practice, the FTA looks at both your supplies and your expenses before accepting this.
Read more: How to Register for VAT in the UAE
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The Deadline: 20 Business Days
You have 20 business days to submit your deregistration application — counted from the day the trigger occurs, not from the end of that month. The trigger is either the day you stop making taxable supplies, or the day your rolling 12-month taxable supplies fall below AED 187,500.
This is the deadline for submission, not a processing time. Once the FTA approves your application:
- A mandatory deregistration takes effect from the last day of the tax period in which the conditions were met.
- A voluntary deregistration takes effect from the date you requested.
- The FTA notifies you of the effective date within 10 business days of its decision.
How to Apply for VAT Deregistration
Applying for deregistration is not a casual click on a dashboard — it requires documentation, and the FTA will not process it while returns or liabilities are outstanding.
- Log in to the FTA e-Services portal using your existing account.
- Go to the VAT tab and select “De-Register.” Declare your reason for deregistering and provide your taxable supplies history.
- Attach supporting documents — audited financials, a closure letter, or evidence of ceased taxable supplies, as applicable.
- File your final VAT return and settle all outstanding tax and penalties. The FTA will not close your registration until this is done.
- Await FTA review. You remain VAT-liable — filing returns and issuing VAT-compliant invoices — until the deregistration is formally approved.
Read more: How to File a VAT Return in the UAE
Two Obligations Most Guides Miss
1. File a Final Return and Settle Everything Due
Before the FTA closes your registration, you must file a final VAT return and settle all tax and penalties due. This is a precondition, not a formality — an application with outstanding liabilities will not be approved.
2. Remaining Business Assets Are Treated as Sold
Any goods and services still held as business assets at the point of deregistration — unsold stock, equipment, anything the business still owns — are treated as if they were supplied immediately before deregistration. The VAT on that deemed supply goes on your final return. This catches businesses closing down with unsold inventory more often than any other step in the process.
The Penalty for Missing the Deadline
The penalty is AED 1,000 on late submission, then a further AED 1,000 on the same date every following month the application remains outstanding — capped at AED 10,000 in total. It is not a flat AED 10,000 charge; that figure is the ceiling, reached after nine months of non-compliance.
This monthly mechanism has applied since 28 June 2021. It is separate from the penalty for filing a VAT return late, which is a different violation under the same Cabinet Decision and does not apply here.
Common Mistakes to Avoid
- Missing the deregistration deadline. Track your taxable supplies monthly against the AED 187,500 mandatory threshold, and set an internal reminder rather than discovering the trigger date after it has passed.
- Applying with outstanding returns or liabilities. The FTA will not review your application until pending returns are filed and dues are settled.
- Assuming deregistration means immediate relief. You remain VAT-liable — filing returns, issuing VAT-compliant invoices — until the FTA formally approves the application.
- Incomplete or inaccurate information. Incorrect trade licence numbers, outdated contact details, or misreported taxable supplies delay or reject applications. Check every field against your official documents before submitting.
- Forgetting the deemed disposal of remaining assets. Unsold stock or equipment still on the books at deregistration is treated as supplied, and the VAT on it belongs on your final return — not an afterthought once the registration is already closed.
Why mazeed Is Your Compliance Co-Pilot
mazeed goes beyond automation — it offers hands-on support for the full deregistration journey, from confirming eligibility to filing the final return and making sure the deemed-disposal VAT is accounted for correctly.
- Tailored support for deregistration and re-registration planning
- Tracking against the 20-business-day deadline
- Final return preparation, including deemed-supply calculations
- VAT compliance automation throughout
FAQs about VAT Deregistration in the UAE
What is the threshold for mandatory VAT deregistration in the UAE?
AED 187,500. A business must apply to deregister once its taxable supplies over the preceding 12 months fall below this figure, or once it stops making taxable supplies altogether.
What is the threshold for voluntary VAT deregistration?
AED 375,000. A business may apply to deregister voluntarily once taxable supplies over the preceding 12 months fall below this figure, provided they remain at or above the AED 187,500 mandatory threshold. A business that registered voluntarily cannot apply to deregister within 12 months of its registration date.
How to deregister for VAT in the UAE?
Log in to your FTA e-Services account, go to the VAT tab, select “De-Register,” declare your reason and taxable supplies history, attach supporting documents, file your final VAT return, settle any outstanding tax and penalties, and submit for FTA approval.
What is the deadline to apply for VAT deregistration?
20 business days from the date the trigger occurs — the day taxable supplies stop, or the day the rolling 12-month total falls below AED 187,500. This is the submission deadline, not a processing time.
What is the penalty for missing the VAT deregistration deadline?
AED 1,000 on late submission, then a further AED 1,000 on the same date each following month the application remains outstanding, capped at AED 10,000 in total.
When does deregistration actually take effect?
A mandatory deregistration takes effect from the last day of the tax period in which the conditions were met. A voluntary deregistration takes effect from the date requested. The FTA notifies the business of the effective date within 10 business days of its decision.
Do I still need to file a VAT return after deregistering?
Yes. A final VAT return must be filed covering the period up to deregistration, and all outstanding tax and penalties must be settled before the FTA closes the registration.
What happens to unsold stock or equipment when I deregister?
Any goods and services still held as business assets at deregistration are treated as supplied immediately beforehand, and VAT is due on that deemed supply as part of your final return.
Can I avoid deregistering if my supplies have temporarily dropped?
Yes, in one specific case: if your taxable supplies have fallen below AED 187,500 but you expect supplies or taxable expenses to exceed AED 187,500 again within the next 30 days, you are not required to deregister. The FTA reviews both supplies and expenses before accepting this.
Can I re-register for VAT after deregistering?
Yes. A business can re-register at any time if it once again meets the mandatory threshold, or opts for voluntary registration above the minimum threshold.
What documents are required for VAT deregistration?
A completed deregistration form via the FTA portal, proof of business identity such as a valid trade licence, and supporting documents such as financial statements, invoices, or evidence of ceased taxable activity.
Why might the FTA reject a deregistration application?
Common reasons include missing documents, incorrect or incomplete information, unpaid VAT liabilities, or evidence that taxable activity is still ongoing.
Official References
[1] Federal Decree-Law No. 8 of 2017 on Value Added Tax, as amended (consolidated text through Federal Decree-Law No. 16 of 2025): Article 21(1) — mandatory deregistration; Article 22 — voluntary deregistration; Article 23 — 12-month bar for voluntary registrants; Article 19 — what counts toward the threshold.
[2] VAT Executive Regulation issued under Cabinet Decision No. 52 of 2017, as amended (consolidated text through Cabinet Decision No. 100 of 2025): Article 7(1) — AED 375,000 threshold; Article 8(1) — AED 187,500 threshold; Article 14(1) — 20-business-day deadline; Article 14(2) — conditions the FTA applies before accepting mandatory deregistration, including the 30-day exception; Article 14(3), (5), (6) — effective date and notification; Article 14(7) — final return and settlement; Article 14(8) — deemed supply of remaining assets.
[3] Cabinet Decision No. 40 of 2017 on Administrative Penalties, Table 1, item 4, as amended by Cabinet Decision No. 49 of 2021 (in force 28 June 2021) and Cabinet Decision No. 129 of 2025 (in force 14 April 2026 — did not change the deregistration penalty). Underlying violation: Article 24(1)(d), Federal Decree-Law No. 28 of 2022 on Tax Procedures.
[4] Article 11(4), Federal Decree-Law No. 8 of 2017 — deemed supply on deregistration.
Disclaimer: This publication is for informational purposes only and should not be considered professional or legal advice. While we strive for accuracy, we make no guarantees regarding completeness or applicability. mazeed, its members, employees, and agents do not accept or assume any liability, responsibility, or duty of care for any actions taken or decisions made based on this content. For official tax guidance, please refer to the UAE Ministry of Finance and the Federal Tax Authority
