Closing a UAE company: Corporate Tax and VAT deregistration in the right order

When a UAE company stops trading, the licence cancellation, the liquidation and the tax file are three separate processes. A common and costly mistake is to cancel the licence and assume the tax registrations end with it. They do not: the Federal Tax Authority (FTA) keeps the company registered until it applies to deregister — and approves deregistration only once every return is filed and every amount is paid.

The two deregistration deadlines

The order that works

1. Fix the closing date. Agree the date the business stops trading. The final accounting period, the last VAT return and the last Corporate Tax return all run to that date.
2. Close the books. Record the final sales and costs, collect or write off amounts owed to the company, settle what it owes and deal with remaining assets. The final accounts — normally also needed for the liquidation — are the basis for the last Corporate Tax return.
3. File the final VAT return. It includes VAT on business assets still held at deregistration where that applies. Any VAT due is paid with it.
4. File the final Corporate Tax return. The FTA will not deregister the company until all Corporate Tax returns up to the date of cessation are filed and any tax and penalties are paid. In practice, the final return is therefore prepared within the three-month deregistration window, not left to the usual nine months.
5. Apply to deregister. Both applications are made on EmaraTax, with evidence of the closure — for example the licence cancellation, the liquidator's report or shareholder resolutions, and financial statements up to the cancellation date.

Where closures go wrong

• The licence is cancelled, but VAT and Corporate Tax stay registered, and return and deregistration penalties keep building.
• The final VAT return leaves out assets still held, which can lead to a later assessment.
• The final period's books are incomplete, so the last Corporate Tax return cannot be filed — and deregistration cannot be approved.
• Records are discarded after closure. Corporate Tax records are kept for 7 years and VAT records for at least 5 years, so decide who will keep them.

Not closing, just quiet?

A company that still exists but is not trading generally stays registered for Corporate Tax and keeps filing returns, even nil returns. VAT deregistration may still be required if it no longer makes taxable supplies. If there is no plan to use the company, closing it may cost less over time — see what a low-activity company still has to file.

How we help

We map the closure so that the licence cancellation, VAT deregistration and Corporate Tax deregistration line up; prepare the final-period accounts and returns; and prepare the deregistration applications for submission through your EmaraTax account. The company-law side — liquidator, notices and licence cancellation — is coordinated by our company services team at ProBiz Setup, working with a registered liquidator.

Our published fee for VAT or Corporate Tax deregistration is AED 999^* for each tax; final returns are charged at our package rates. See VAT and Corporate Tax deregistration, or tell us your planned closing date.