In the changing tax environment of the UAE, companies sometimes must exit or terminate their tax registration. Regardless of the purpose of closing operations, restructuring, or migrating your entity, it is important to navigate the process of corporate tax deregistration. Any step in the wrong direction may result in fines or issues with the Federal Tax Authority (FTA).
This guide focuses on the UAE corporate tax deregistration: eligibility requirements, process of corporate tax deregistration, the timeline, how to file final corporate tax return UAE and best practice to achieve smooth exit. You are considering deregistering: read on!– and at the bottom of the page, you will find how Awami will help you through the process.
Corporate tax deregistration This is the cancellation or deregistration of a company in respect of corporate tax before the FTA. Upon deregistration the entity ceases to be considered a taxable person under the UAE Corporate Tax Law, subject to approvals and meeting of requirements.
The deregistration procedure is provided in Article 52 of Corporate Tax Law according to which the Person with the Tax Registration Number shall submit to the Tax Authority a Tax Deregistration application whereby there is a termination of its Business or Business Activity. and all arrears of returns, taxes, and penalties be first paid.
This is not a formality as the FTA will have to consent to your request and the effective date of deregistration can be on your business date of cessation or any other date set by the authority
Why Businesses Seek Corporate Tax Deregistration
We need to get down to the process but, first, we need to know typical situations when businesses elect to deregistration:
- Full business closure: the business halts its trading business.
- Distribution or sale, or a change of ownership to another entity or owner.
- Winding up or winding down.
- Re-domiciliation or transferring a business to outside the UAE.
- Restructuring of such that the business is now conducted through a different legal entity.
In every such situation, you are required to clear up all any outstanding liabilities, prepare and submit final returns, and use
Eligibility for Corporate Tax Deregistration
All companies are not deregistable (on command). You have to meet some corporate tax deregistration requirements. Basic requirements are as follows:
1.Abandoning of business activity
The company should be no longer operating (completely or partially) and not making a taxable income any longer.Deregistration would not be acceptable if you are still on the move.
2.All tax obligations cleared
You need to have submitted any appropriate corporate tax returns (to the date of ceasing operation) and paid any tax and administrative penalty.
3.No outstanding compliance issues.
Any unanswered questions or investigations by FTA must also be terminated or solved before deregistration is done.
4.Justifications and support material.
You will be required to provide evidence or argument as to why deregistration is requested (e.g. liquidation certificate, board resolution, etc.).
When the conditions are met, you can apply through the EmaraTax portal of FTA. Do keep in mind though that eligibility is determined on a case-by-case basis.
Corporate Tax Deregistration step - by - step
The following is an elegant guide on the process of deregistration of corporate tax in UAE:
Step 1: Enter EmaraTax Portal: Go to the EmaraTax portal with your credentials or UAE Pass. In case of unauthorized access, you need to restore credentials or create an account.
Step 2: Navigate to Your Taxable Person Dashboard : After logging in, find the titled Taxable Person (in case of corporate tax) and then select Actions – De-Register or something equivalent.
Step 3: See Instructions and Check : You shall find there are instructions and guidelines on corporate tax deregistration. Read these with utmost care, note disclaimers and ensure that you have agreed to the terms.
Step 4: Deregistration Information : You’ll need to enter:
The date when the business or business activity stopped.
Cessation reason (closure, transfer, merger, etc.).
Where necessary, details of buyer or transferee (of a sale or transfer).
Also, any other information or evidence (documents) about your case.
Step 5: Review, Declare & Submit
Cross-check information entered. After doing this, check the statement that the information is correct and true and hit Submit.
Step 6: Accept Reference and Waiting FTA Decision : You will be given a reference number on submission. The FTA will examine, perhaps seek clarifications, and will approve or disapprove your deregistration.
Deregulation is effective on the date of cessation, or another date as decided by the FTA, in case approved.
UAE Final Corporate Tax Return
Under the deregistration, you nearly always must have filed your final corporate tax return in UAE (to the period at any rate to the period of cessation). Key points:
- It must contain all incomes, deductions and adjustments until the termination date.
- You are to compute the taxable amount of the period including any pro rata amounts.
- Make sure that you treat any carry forward losses or credits.
- The FTA can demand reconciliations, schedule supporting schedules or audit exhibits.
- Not filing or filing incorrect final return can lead to a postponement in the deregistration or you might face punishment.
Timeline for Corporate Tax Deregistration
The history of corporate tax deregistration will allow you to plan in advance. Though the FTA does not issue hard deadlines, in reality:
Most parties file the deregistration application, within 3 months after the business stops.
With complexity, it could also take several weeks to a few months to get the review and queries approved and get FTA approval.
Where clarifications are determined, the clock stops until the responses are given.
To prevent delays therefore, companies must initiate the deregistration process immediately they stop operating.
Common Mistakes & Pitfalls to Avoid
In order to simplify your deregistration process, avoid the following pitfalls:
Late submission- failure to submit within 3 months following cessation.
Incomplete final return – The omission of an item of income or expense until the final day.
Unresolved debts – unpaid taxes, fines or untaxed returns prevent authorization.
Lack of effective documentation – absence of evidence of closing or transfer of business.
Ceasing to FTA queries – time taken to answer clarifies is disappointing.
Different dates: No consistent date of cessation between deregistration records and corporate records.Consistency, accuracy, and timeliness are important.
How Awami Simplifies This
Although the process is widely described by most consultancies, the difference with Awami is the end to end support, which includes:
Free evaluation based on your business model (mainland, free zone, offshore).
A complete and ready final corporate tax filings UAE.
Preparation of documents (closure, board resolutions, sale transfers, and so on).
Purchase, analyze and file your corporate tax deregistration in EmaraTax.
Connection with FTA to address doubt and fasten the permission.
Record management and post-deregistration assistance.
We are accurate, fast, and friction-free – your chances of punishment or rejection are low.
Conclusion
UAE deregistration of corporate tax is an important move when companies are winding down operations, merging or reorganizing. And it requires accuracy, adherence, and time, including completing your final corporate tax return UAE and filing a clean application using EmaraTax and completing the process of deregistration of corporate tax with FTA.
Any misstep, such as a missed return or not filing a document or taking too long to reply, could cost you deregistration or penalties.
We are Awami full lifecycle corporate specialists. We can help you with:
- Assess your position on corporate tax deregistration,
- Completing an impeccable final company tax return,
- Administration of your EmaraTax application and follow-ups with FTA,
- Granting clean deregistration and exit.
Are you confident you can deregister your UAE corporate tax registration?
Get in touch with Awami today at +971 52 147 1003 and our professionals will coach you through it. Allow us to deal with complexity and you can move on.
FAQs
1: Who can be a corporate tax deregistration in the UAE?
A: You are eligible provided your company has stopped its business operation, submitted all the required returns and paid all the tax dues and penalties. Article 52 provides that the FTA evaluates each case of eligibility individually.
Q2: How do we deregulate corporate tax?
A: This is done by log-in to EmaraTax, selecting the corporate tax deregistration form and entering the cessation information, submitting a final return, and waiting until the FTA approves it.
Q3: What will be the length of time to deregulate corporate tax?
A: The time may take a couple of weeks to a couple of months based on the complexity and time needed to review FTA. Lots of them take place within 3 months after withdrawal.
Q4: Will I have to make a final corporate tax return UAE?
A: Yes. In the course of deregistration you are required to prepare a final return to the extent of cessation, showing income, expenses and adjustments.
Q5: What is the result following deregistration?
A: Your company will be treated as a taxable person no longer after it is approved and you will not file a corporate tax return after the deregistration date. Nevertheless, previous years can be also reviewed or audited.
Q6: Is it possible to de-register and re-register in the future?
A: It will be based on FTA regulations at the time. In the majority of cases, when starting business again, you might have to re-register and pay corporate taxes starting then.
