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MEDIA / ПОСЛЕДНИЕ НОВОСТИ / 2019 / VAT De-Registration

VAT De-Registration

UAE Government has implemented Value Added Tax (VAT) in the country as per the Cabinet Decision No. (52) of 2017 on the Executive Regulations of the Federal Decree-Law No (8) of 2017. Thus, VAT has come into effect from 01 January 2018 wherein Government has provided mandatory and voluntary provision to register VAT.
 
As per the directives, the Federal Tax Authority (FTA) of the UAE, all entities having a taxable supply exceeding AED 375,000 would be required to register for VAT and those with taxable supply between AED 187,500 and AED 375,000 may opt to register for VAT before o1 January 2018. 
 
Many entities may have voluntary chosen to register for the VAT since their taxable turnover falls in between voluntary and mandatory threshold limit of AED 187,500 and AED 375,000/- or they had expected at the time of registration that that their taxable supplies/services will exceed AED 375,000/- in the next 12 months. However, over a period their circumstance might have changed prompting to review the VAT registration and potentially consider to formally De-register.
 
We reproduce below the article 19 of VAT regulation for a better understanding of the readers.
 
Article 19
 
For the purpose of Art. (25), (26) and (80) of the Decree Law, where tax is due because a payment is made or a tax invoice is issued in respect of a supply of Goods or Services, the Tax shall be due to the extent of the payment made or stated in the Tax Invoice, and the remainder of Due Tax on that supply shall be payable according to the provisions of the Decree-Law.
 
Tax De-registration is the provision for a registered taxable person to cancel their VAT registration. It means de-activation of the registration and the VAT number of the taxable person. Article 14 of the VAT rules and regulation made provision to de-register the VAT registration upon an application from the registrant to the authority for de-registration in accordance with the cases mentioned in the Decree-Law, within (20) business days of the occurrence of any of the below conditions.  
 
The Authority shall accept a Registrant’s application for deregistration where the two following conditions are met:


a.The Registrant stops making supplies referred to in Article (19) of the Decree-Law and does not expect to make any such supplies over the next 12-month period;

b.The value of supplies referred to in Article (19) of the Decree-Law made, or taxable expenses incurred, by the Registrant over the previous 12-months is less than the Voluntary Registration Threshold and the Authority is satisfied that his supplies, according to the provisions of the Decree-Law, or taxable expenses, expected over the next 30 days, are not expected to exceed the Voluntary Registration Threshold.
 
If the registrant not generating the taxable supply or services below the voluntary threshold limit of AED 187,500/- should mandatorily De-Register their VAT Registration to avoid penalties from the Federal Tax Authority within 20 days from the date of expiry of 12 months period of their initial VAT registration.
 
Our in-house VAT experts can assist you in De-Registering from the periodic VAT filing obligations.  Please contact us today on Ph.: +971 4 551 5693 – Email: info@oneworldmideast.net

Due Tax at Date of Supply
For the purposes of Articles (25), (26) and (80) of the Decree-Law, where Tax is due because a payment is made or a Tax Invoice is issued in respect of a supply of Goods or Services, the Tax shall be due to the extent of the payment made or stated in the Tax Invoice, and the remainder of Due Tax on that supply shall be payable according to the provisions of the Decree-Law.


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