Whether you are winding down a mainland LLC, closing a free zone branch, or simply dropping below the VAT threshold, tax deregistration in the UAE is an important compliance step. Cancelling your trade licence does not automatically cancel your Corporate Tax or VAT registration with the Federal Tax Authority (FTA). These are separate processes handled through the EmaraTax portal.
This guide explains the Corporate Tax and VAT deregistration process in the UAE, including eligibility, deadlines, penalties, required documents, and the step-by-step EmaraTax application process.
What Is Tax Deregistration in UAE?
Tax deregistration is the formal process of cancelling your tax registration with the FTA. In the UAE, businesses may need to complete either or both of the following:
- Corporate Tax Deregistration – applies when a person or business ceases to be subject to Corporate Tax.
- VAT Deregistration – applies when a taxable person stops making taxable supplies or falls below the applicable VAT registration threshold.
Both applications are submitted through EmaraTax, but Corporate Tax and VAT have different eligibility requirements, deadlines, and documentation.
Important: Trade Licence Cancellation Is Not Tax Deregistration
Cancelling your trade licence with the DED or a free zone authority does not automatically deregister you from Corporate Tax or VAT.
You must separately apply for tax deregistration through EmaraTax. Otherwise, your tax registration may remain active and applicable penalties can continue to accumulate.
Who Needs Tax Deregistration in the UAE?
Tax deregistration may apply in several situations.
Corporate Tax Deregistration
You may need to deregister from Corporate Tax if:
- Your business has permanently ceased operations.
- The company is undergoing liquidation or dissolution.
- The legal entity ceases to exist because of a merger or acquisition.
- The business has been sold or transferred to new owners.
- The trade licence has expired or been cancelled and will not be renewed.
- A natural person conducting business permanently falls below the applicable AED 1 million turnover threshold.
VAT Deregistration
VAT deregistration may apply when:
- Taxable supplies fall below AED 187,500 over the previous 12 consecutive months.
- The business has permanently stopped making taxable supplies.
- Taxable supplies are between AED 187,500 and AED 375,000 and the business qualifies for voluntary deregistration.
- The business has completely ceased operations.
- The business now exclusively makes VAT-exempt supplies.
Corporate Tax Deregistration Rules
There are several important requirements for Corporate Tax deregistration.
1. Apply Within 3 Months
You must submit your Corporate Tax deregistration application within 3 months from the date of cessation, dissolution, or liquidation.
2. File the Final Corporate Tax Return
Before completing the deregistration process, you must file the final Corporate Tax return covering the period from the beginning of the relevant tax period until the cessation date.
3. Settle Outstanding Liabilities
All outstanding Corporate Tax liabilities and applicable penalties must be settled before the FTA processes the deregistration.
4. FTA Processing
The FTA may take up to 30 business days to process the Corporate Tax deregistration application and may request additional information.
5. Tax Deregistration Certificate
Once approved, the FTA issues a tax deregistration or clearance certificate.
VAT Deregistration Rules
VAT deregistration has a shorter application deadline.
Apply Within 20 Business Days
You must submit the VAT deregistration application within 20 business days from the date you become eligible or required to deregister.
Final VAT Return
After the FTA pre-approves the deregistration, a final VAT return is generated. This must be filed within 28 days of the effective deregistration date.
Deemed Supply
Any taxable goods remaining in your possession at the time of VAT deregistration may be treated as a deemed supply, meaning you may need to account for output VAT on them in your final VAT return.
Tourist Refund Scheme
If your business is registered under the Tourist Refund Scheme (TRS), you must complete TRS deregistration before the FTA processes your VAT deregistration.
The FTA reviews VAT deregistration applications within 20 business days.
Tax Deregistration Penalties in UAE
Missing the deregistration deadline can result in significant penalties.
Under the penalty framework outlined in the source:
| Violation | Penalty | Maximum |
|---|---|---|
| Late Corporate Tax deregistration | AED 1,000 per month | AED 10,000 |
| Late VAT deregistration | AED 1,000 for the first month + AED 1,000 for each subsequent month | AED 10,000 |
| Late tax payment | 14% per annum, applied monthly | No cap |
| Late Corporate Tax return | AED 500/month for first 12 months, then AED 1,000/month | No cap |
| Late VAT return | AED 1,000 first offence; AED 2,000 for repeat offence within 24 months | Escalating |
The source states that these rates reflect Cabinet Decision No. 129/2025, effective 14 April 2026, together with Cabinet Decision No. 75/2023.
Is There a Deregistration Penalty Waiver?
The source states that there is currently no waiver programme specifically for late deregistration penalties. Once such penalties accrue, they must be dealt with through the applicable FTA process.
How to Deregister from Corporate Tax Through EmaraTax
Step 1: Settle Outstanding Liabilities
Make sure all Corporate Tax returns have been filed and all outstanding taxes and penalties have been paid.
Step 2: File the Final Corporate Tax Return
Submit the final return covering the period from the beginning of the tax period through your cessation date.
Step 3: Log in to EmaraTax
Access the FTA’s EmaraTax portal using your UAE PASS credentials and open your taxable person dashboard.
Step 4: Submit the Deregistration Application
Select the Corporate Tax deregistration option and provide your cessation date, reason for deregistration, and supporting information.
Step 5: Upload Supporting Documents
Depending on your circumstances, documents may include:
- Trade licence cancellation letter
- Shareholder or board liquidation resolution
- Final Corporate Tax return confirmation
- Sale or transfer agreements
- Proof that outstanding liabilities have been settled
Step 6: Wait for the FTA Decision
The FTA reviews the application and may request additional information.
Step 7: Receive Your Deregistration Certificate
Once approved, the FTA issues confirmation that your Corporate Tax registration has been cancelled.
How to Deregister from VAT Through EmaraTax
Step 1: Confirm Your Eligibility
Check whether you qualify for mandatory or voluntary VAT deregistration or whether you have permanently ceased taxable supplies.
Step 2: Deregister From the Tourist Refund Scheme
Complete this step first if your business is registered under TRS.
Step 3: Log in to EmaraTax
Access the VAT deregistration section through your taxable person dashboard.
Step 4: Complete the Application
Provide your deregistration reason, eligibility basis, effective date, taxable supplies figures, and updated bank details where applicable.
Step 5: Upload Supporting Documents
These may include:
- Cancelled trade licence or closure certificate
- Board resolution
- Latest financial statements
- Trial balance
- Profit and loss statement
- Balance sheet
- Liquidation documents, where applicable
Step 6: Submit the Application
Review all information carefully, submit the application, and retain the confirmation reference.
Step 7: File the Final VAT Return
Once the FTA pre-approves the deregistration, file the final VAT return within the required deadline and account for any applicable deemed supplies.
Common Tax Deregistration Mistakes to Avoid
1. Assuming Trade Licence Cancellation Cancels Tax Registration
Your business licence and FTA tax registration are separate. Cancelling one does not automatically cancel the other.
2. Missing the Deregistration Deadline
The Corporate Tax deadline is 3 months, while the VAT deadline is 20 business days in the circumstances described above.
3. Applying Before Filing the Final Return
Your final tax returns should be completed before submitting the relevant deregistration application.
4. Forgetting Deemed Supply VAT
Businesses often overlook VAT implications for taxable stock, assets, or capital goods remaining at deregistration.
5. Ignoring Record Retention
Deregistration does not mean you can immediately dispose of your tax records. The source notes ongoing retention requirements for VAT, Corporate Tax, real estate, and other records.
6. Failing to Deregister From Every Applicable Tax
If you are registered for both Corporate Tax and VAT, each registration has its own deregistration process.
New in 2026: DMTT Deregistration Rules
The source also highlights new Domestic Minimum Top-up Tax (DMTT) requirements introduced under FTA Decision No. 12 of 2026.
These rules apply to qualifying multinational enterprise groups meeting the relevant revenue threshold under Cabinet Decision No. 142 of 2024.
If a group previously met the relevant threshold but no longer qualifies, it may need to follow the applicable DMTT deregistration or notification requirements.
How Tax Falcon Can Help With Tax Deregistration
Tax deregistration involves multiple deadlines, final returns, documentation, and FTA procedures.
Tax Falcon UAE, an FTA-approved tax advisory firm (Registration No. 20056800), can assist with:
- Tax deregistration eligibility assessment
- Final Corporate Tax return preparation
- Final VAT return preparation
- Deemed supply calculations
- EmaraTax application management
- FTA correspondence
- Penalty mitigation and reconsideration
- Post-deregistration compliance
- Record retention guidance
Frequently Asked Questions
How long does tax deregistration take in the UAE?
Corporate Tax deregistration may take up to 30 business days for FTA processing, while VAT deregistration is reviewed within 20 business days. The overall timeline can be longer depending on final returns, outstanding liabilities, and FTA information requests.
Can I deregister from VAT but remain registered for Corporate Tax?
Yes. VAT and Corporate Tax registrations are independent. A business may deregister from VAT while continuing to have Corporate Tax obligations.
What happens if I miss the deregistration deadline?
Late deregistration can result in monthly penalties. The source states AED 1,000 per month for late Corporate Tax deregistration, up to AED 10,000, with a similar monthly penalty structure for VAT deregistration.
Do I still need to file tax returns after deregistration?
Once the FTA approves your deregistration, you generally no longer need to file returns for future periods. However, you must complete the final return covering your last period of activity and retain relevant records for the required period.
Can the FTA force-deregister a business?
The source states that the FTA can unilaterally deregister non-compliant entities in certain circumstances. However, forced deregistration does not remove outstanding tax liabilities or penalties.
Need Help With Tax Deregistration in UAE?
If you are closing your business, cancelling your licence, restructuring your company, or becoming eligible for VAT deregistration, it is important to complete the FTA process correctly and on time.
Tax Falcon UAE can assist you from the final tax return through the EmaraTax application and deregistration process.
Phone: +971 56 973 0073
Email: support@taxfalconuae.com
Website: taxfalconuae.com
Address: Level 1, Yas Mall, Yas Island, Abu Dhabi
Disclaimer: This blog is for informational purposes only and does not constitute legal or tax advice. Tax laws and FTA procedures may change. Always consult a qualified tax advisor for advice specific to your business.