A Definitive Guide to Corporate Tax Deregistration in the UAE

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In this blog, we will explain the process of corporate tax deregistration in the UAE in a simple and easy-to-understand way. Large companies and small businesses alike may need to deregister from corporate tax due to closing down or other reasons. Let’s learn the rules set by the Federal Tax Authority (FTA) for deregistration in 2024.

When Can You Apply for Corporate Tax Deregistration?

There are a few main reasons why a business may need to apply for corporate tax deregistration in the UAE:

Closing/Ceasing Business Operations

If a business stops all operations and activity permanently in the UAE, they must deregister from corporate tax with FTA.

Selling the Business

When an existing business is purchased by a new owner, the seller has to deregister their old corporate tax number. The new buyer then registers a new tax number.

Merging with Another Company

If two companies legally combine to form one large company together, one or both previous tax registrations must be removed through deregistration.

Relocating/Changing Business Location

A company that relocates all business activities fully outside the UAE boundary has to deregister their previous in-UAE corporate tax registration number.

Timeline and Deadline for Deregistration

The Federal Tax Authority (FTA) has set a clear timeline for businesses to apply for deregistration. For natural persons like sole proprietors, the deadline is 3 months from when the business closed. For legal entities like companies, the deadline is 3 months from the deregistration event like cessation, sale etc. It is important to meet this deadline to avoid potential fines.

Required Documents for Application

Some key documents required for the deregistration application include:

  • Trade License Cancellation Certificate
  • No Objection Certificate from the Department of Economic Development
  • Audited final accounts from closure/sale date
  • Proof of tax return submissions and tax payment clearance

Step-by-Step Deregistration Process

The application process generally takes the following steps:

  • Gather all required documents
  • Prepare and submit the deregistration form to FTA along with documents
  • FTA will process and may request more clarification or documents
  • Once approved, FTA will issue a deregistration certificate
  • Inform all relevant business partners and cancel all licenses
  • It is always better to seek assistance from expert corporate tax consultants to ensure smooth deregistration compliance.

Conclusion

Keeping correct compliance is important when deregistering from UAE corporate tax. By understanding the deregistration guidelines, timeline, and process, businesses can ensure smooth completion. They can finish deregistration formalities on time. It is also recommended to consult tax experts. They can help you navigate the process well. This will make deregistration in the UAE hassle-free.

FAQs

What if I miss the deadline?

Missing the deadline risks financial penalties from FTA. It is important to deregister on time to avoid penalties.

How do I clear my tax liabilities?

You will need to file all past tax returns. Also, be sure to pay all taxes and assessments in full. Then, apply for deregistration.

Can I re-register later?

Yes, you can re-register for corporate tax. This is possible if the business resumes operations in UAE.

What about pending tax assessments?

You must finish all pending or ongoing tax assessments. FTA will not approve the deregistration until you do.

What is the refund process if taxes were overpaid?

FTA will process approved tax refunds after deregistration. The tax account must be fully closed.

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VIBHA MALIK MODI

Ms. Vibha Modi, CA, is supported by 13+ Years of Corporate Tax, International Taxation and Accounting Expertise.

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