Value-added tax (VAT) is a consumption tax that is levied on goods and services in many countries. VAT is typically collected by the seller at the time of sale and remitted to the government.
If you are registered for VAT, you are required to charge VAT on your taxable supplies of goods and services, and you are entitled to claim back any VAT that you have paid on your business expenses. However, there may be circumstances under which you can deregister for VAT, which means that you are no longer required to charge VAT on your taxable supplies and you cannot claim back VAT on your business expenses.
There are several reasons why an organization may choose to deregister for VAT, including:
- The organization’s taxable supplies have fallen below the VAT registration threshold: In many countries, VAT registration is only required if an organization’s taxable supplies exceed a certain threshold. If the organization’s taxable supplies fall below this threshold, it may be eligible to deregister for VAT.
- The organization is ceasing business operations: If an organization is closing down or ceasing business operations, it may deregister for VAT.
- The organization is changing its business structure: If an organization is changing its business structure, it may be required to deregister for VAT and re-register as a different type of business entity.
To deregister for VAT, the organization must typically notify the relevant tax authority and provide evidence that it meets the requirements for deregistration. It is important to note that deregistration for VAT is not automatic and must be requested and approved by the tax authority.
VAT Deregistration in the UAE
In the United Arab Emirates (UAE), value-added tax (VAT) is a consumption tax that is levied on the supply of most goods and services. If you are registered for VAT in the UAE, you are required to charge VAT on your taxable supplies of goods and services and you are entitled to claim back any VAT that you have paid on your business expenses.
There may be circumstances under which you can deregister for VAT in the UAE, including:
- Your taxable supplies have fallen below the VAT registration threshold: In the UAE, VAT registration is only required if an organization’s taxable supplies exceed AED 375,000 in a 12-month period. If your taxable supplies fall below this threshold, you may be eligible to deregister for VAT.
- You are ceasing business operations: If you are closing down or ceasing business operations in the UAE, you may deregister for VAT.
- You are changing your business structure: If you are changing your business structure, you may be required to deregister for VAT and re-register as a different type of business entity.
To deregister for VAT in the UAE, you must notify the Federal Tax Authority (FTA) and provide evidence that you meet the requirements for deregistration. It is important to note that deregistration for VAT is not automatic and must be requested and approved by the FTA.
It is advisable to seek the advice of a professional tax advisor or a legal professional to ensure that you are complying with all relevant laws and regulations when deregistering for VAT in the UAE.