Corporate Tax Deregistration in UAE

What is Corporate Tax Deregistration in UAE?

Corporate Tax Deregistration is required when a company:

• Ceases business operations permanently
• Is liquidated or dissolved
• Is no longer liable for UAE Corporate Tax due to legal structure changes

It ensures the FTA updates its records and stops issuing tax obligations to a non-active or ineligible entity.

When a company or business activity in the UAE comes to an end, the taxpayer is required to notify the Federal Tax Authority (FTA) and de-register for Corporate Tax (CT) within three months of that date. Corporate Tax deregistration in UAE is a critical process that allows businesses to cease their liability for paying corporate taxes. It is important to note that a company is still subject to CT paying and filing requirements while it is in the process of being wound up.

The FTA oversees and regulates the deregistration process to ensure compliance with the applicable laws and regulations. Businesses need to navigate this procedure carefully to avoid penalties and ensure seamless closure or restructuring.

Helpful for you: How to Register for Corporate Tax in UAE

Reasons for Corporate Tax Deregistration in UAE

Businesses may need to deregister from corporate tax for several reasons, including:

• Closure of Business – Companies that cease operations due to bankruptcy, insolvency, or strategic decisions to wind up must apply for deregistration.
• Change in Legal Structure – If a company undergoes a merger, acquisition, or conversion to a different entity type, deregistration is necessary.
• Transfer of Ownership – When a company is sold or the ownership is transferred, the new owner assumes responsibility for tax registration, while the previous owner must deregister.
• Miscellaneous Scenarios – A company that did not previously register for CT but is undergoing liquidation must register, file CT returns for all applicable periods, and then apply for deregistration to remain compliant.

Corporate Tax Deregistration Requirements in UAE

To apply for deregistration, the following must be met:

1. Cessation of Business: Business must have ceased all taxable activities.
2. Final Corporate Tax Return: File the final return for the last active financial year.
3. Outstanding Dues: Settle all due corporate tax liabilities and penalties.
4. Clearance Certificates (if under liquidation): Attach proof from the liquidator (if applicable).
5. Active Tax Registration Number (TRN): The business must have been previously registered for Corporate Tax.

Corporate Tax Deregistration Deadline in UAE

The application must be submitted:

• Within 3 months from the date of business cessation, liquidation, or when the entity is no longer subject to corporate tax obligations.

Failure to meet the deadline may lead to administrative penalties.

Eligibility Criteria for Deregistration

To be eligible for deregistration, a taxpayer must:

• File all required CT returns, including the return for the period up to the cessation of the business.
• Pay all taxes due.
• Settle all administrative penalties as mandated by law.

Penalties for Late Corporate Tax Deregistration

Failure to comply with the stipulated timelines for CT deregistration can result in penalties, as follows:

• A penalty of AED1,000 applies for failing to apply for deregistration within three months of a cessation, dissolution, liquidation, or other termination event.
• An additional penalty of AED1,000 is charged monthly on the same date, up to a maximum of AED10,000. For example, if a company delays deregistration by two months, it may incur a penalty of AED2,000 in addition to the initial fine of AED1,000.
• The FTA reserves the right to deregister entities that violate tax deregistration requirements.

How to Apply for Corporate Tax Deregistration in UAE

Here’s the step-by-step process:

1. Log into the EmaraTax Portal
2. Select Your TRN: Go to your business tax account.
3. Choose “Corporate Tax Deregistration” under available services.
4. Fill out the Deregistration Form with:
   • Reason for deregistration
   • Date of cessation
   • Final tax return submission confirmation
5. Attach Required Documents:
   • Business closure or liquidation certificate
   • Final return proof
   • Clearance certificate (if needed)
6. Submit the Application to the FTA for review.

The FTA may approve, reject, or ask for more documentation. You will be notified of the decision via the portal and email.

Why Choose Audit Firms in UAE for Corporate Tax Deregistration?

Corporate tax deregistration can be a complex process, but professional audit firms in UAE provide expert guidance to ensure a seamless and efficient experience. With their deep understanding of tax regulations and compliance requirements, they help businesses complete deregistration smoothly while minimizing risks and ensuring full FTA compliance.

• Expert Knowledge – Their team of qualified and experienced professionals have a deep understanding of UAE corporate tax regulations and the deregistration process.
• Comprehensive Support – They can handle every aspect of deregistration, from filing applications to ensuring compliance with all legal requirements.

FAQs

How to Deregister for Corporate Tax in UAE?

To deregister from Corporate Tax (CT) in the UAE, follow these steps:

1. Ensure Eligibility: A business can apply for deregistration if it ceases operations, undergoes liquidation, or no longer meets the criteria for corporate tax registration.
2. Submit an Application: File a corporate tax deregistration request through the EmaraTax platform on the Federal Tax Authority (FTA) website.
3. Clear Tax Obligations: Ensure all outstanding tax liabilities and pending returns are settled before applying.
4. Approval Process: The FTA will review the request, and upon approval, issue a confirmation of deregistration.

When to Deregister for VAT in UAE?

VAT deregistration in the UAE applies in two cases:

1. Mandatory VAT Deregistration:
   • If the annual turnover falls below AED 187,500 (the voluntary registration threshold).
   • If the business ceases operations or no longer makes taxable supplies.
2. Voluntary VAT Deregistration:
   • If the annual turnover drops below AED 375,000 (the mandatory VAT threshold) but remains above AED 187,500.
   • Businesses can apply through the FTA portal, but they must comply with tax clearance requirements.

Is it Mandatory to Register for Corporate Tax in the UAE?

Yes, corporate tax registration is mandatory for:

• All UAE-based businesses generating taxable income.
• Free Zone entities, even if they qualify for a 0% tax rate under the Free Zone Corporate Tax Regime.
• Foreign companies with a permanent establishment in the UAE.

However, individuals and small businesses earning below AED 375,000 per year are exempt from corporate tax registration.

What is Exempt from Corporate Tax in UAE?

The following are exempt from UAE Corporate Tax (9%):

1. Government entities & government-controlled organizations
2. Public benefit organizations & charities (approved by FTA)
3. Qualifying Free Zone entities (subject to meeting specific conditions)
4. Businesses engaged in natural resource extraction (subject to Emirate-level taxation)
5. Personal income from employment, real estate, and investments (if not conducted under a business license)