VAT and Corporate Tax deregistration — close the tax file properly
Cancelling a trade licence does not close your tax registrations. If VAT and Corporate Tax are not deregistered on time, penalties keep running. We prepare the final returns and both deregistration applications.
The two deadlines
| VAT deregistration | Within 20 business days of the event that requires it — for example stopping taxable supplies, or supplies falling below AED 187,500 over 12 months and not expected to exceed it in the next 30 days |
| Corporate Tax deregistration | Within 3 months of the business ceasing — through dissolution, liquidation, sale or otherwise |
| Late deregistration penalty | AED 1,000, then AED 1,000 for each further month, up to AED 10,000 (for each tax) |
What has to be done first
- VAT: a final VAT return, including VAT on business assets still held at deregistration where required, and payment of any VAT due.
- Corporate Tax: all returns up to the date of cessation filed, and any tax and penalties paid — the FTA will not deregister you until this is done.
- Evidence of the closure, such as the licence cancellation, liquidator's report or shareholder resolutions.
Where closures go wrong
- The licence is cancelled, but VAT and Corporate Tax stay registered and penalties accumulate.
- The final VAT return leaves out assets still held, triggering a later assessment.
- Books for the final period are incomplete, so the last Corporate Tax return cannot be filed.
How we help
- We map the closure timeline so that the licence cancellation, VAT deregistration and Corporate Tax deregistration line up.
- We prepare the final accounts and returns, and the deregistration applications on EmaraTax.
- For groups and foreign-owned companies, we review cross-border and related-party points on exit, and support you with any FTA queries or penalty matters that arise.
Sources: Federal Decree-Law No. 8 of 2017 on VAT, as amended (Articles 21 and 22); Federal Decree-Law No. 47 of 2022 on Corporate Tax (Article 52); Cabinet Decision No. 40 of 2017 and Cabinet Decision No. 75 of 2023 on administrative penalties, as amended.
Frequently asked questions
Do I need to deregister if the company is dormant but not closed?
Not necessarily for Corporate Tax — a dormant company that still exists generally remains registered and files returns. For VAT, deregistration may be required if you no longer make taxable supplies. We check your position first.
Can the FTA refuse to deregister me?
Yes, until all returns are filed and all tax and penalties are paid. That is why the final books and returns come first.
Is liquidation the same as deregistration?
No. Liquidation and licence cancellation are company-law steps; VAT and Corporate Tax deregistration are separate applications to the FTA.
Ready to hand over your books and returns?
Tell us about your company and we'll send a fixed-fee proposal within one business day.