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Generally, the cancellation of TRN/VAT Registration is called VAT Deregistration with the Federal Tax Authority (FTA). There could be various reasons, why a previously taxed business or an individual can opt for cancelling their registration for VAT. Such reasons are needed to fall under the conditions defined by the law related to VAT. Unless the reasons are valid and the conditions are fulfilled, the FTA might disapprove the application to deregistration. Even with the valid reason, the approval from FTA will show the status of the application as “Pre-Approved” and will only be considered complete when all these liabilities are cleared and afterwards fully deregistered.

VAT deregistration of TRN from the FTA is required in certain cases. Following are the scenarios when a VAT Registered person should go for De-Registration.

1) If he stops making Taxable Supplies.

2) If the value of the Taxable Supplies made over a period of 12 consecutive months is less than the Voluntary Registration Threshold (AED 187,500) and will not anticipate to cross the Voluntary Registration Threshold during the next 30-days.

3) If the value of the Taxable Supplies made over a period of 12 consecutive months is above the Voluntary Registration Threshold (AED 187,500) but below Mandatory Registration Threshold (AED 375,000) and will not anticipate that they’ll cross the Mandatory Registration Threshold during the next 30-days.

The penalty for failing to apply for a mandatory de-registration of VAT within the specified time frame i.e. within 20 business days, from the occurrence of the event causing the tax payer entity to get eligible for tax deregistration, is AED. 10,000.

This entire process may seem a little bit chaotic to a person who doesn’t have proper idea. This is the reason why you have to get in touch with a reliable VAT consultant who can help with the entire deregistration process without any mistakes which leads to penalties. We, VATBOX with good experience can handle the entire process while you can focus on any other work you have.