Do you need to keep filing Nil Return or are you liable for Deregistration?

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It may happen sometimes that business face a dilemma, whether it can deregister from VAT, or continue being registered with the Federal Tax Authority and keep filing Nil VAT returns inspite of no business taking place.

Nil return

Nil return will have to be filed by the companies and taxpayers in case of following circumstance-

  • No business transaction took place i.e. no sales or no purchase.

VAT Deregistration

VAT Law provides registered taxable persons with the facility to cancel their VAT registration. It is called as VAT Deregistration.

It is the provision for a registered taxable person/business to cancel VAT registration. It means de-activation of the registration and the VAT number of the taxable person/business. Tax de-registration can be applied for by a person/business registered under VAT or done by the FTA on finding that a person/business meets the conditions for de-registration.

FTA published following conditions to know whether one can apply for deregistration-

  • Business stops making taxable supplies and does not expect to make any taxable supplies over the next 12-month period.
  • Business’ taxable supplies or taxable expenses incurred over a period of 12 consecutive months is less than the voluntary registration threshold (AED 187,500) and does not anticipate to cross this threshold in the next 30 days.

However, a business that has voluntarily registered under VAT cannot apply for de-registration in the 12 months following the date of registration.

VAT de-registration is a welcome option for business that has registered under VAT but do not continue to make supplies requiring registration.

It is evident to take assistance from VAT professionals who can handle all your VAT-related concerns to eradicate confusions and avoid incurring unnecessary penalties.

You can contact us directly. Our Experts will help you out!

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