All About Corporate Tax Deregistration In The UAE

When a company or business in the UAE decides to stop operating, it needs to inform the FTA. As it is no longer liable to pay taxes, it needs to go through a formal process of corporate tax deregistration in the UAE. This process makes sure that a business is removed from the tax authority’s records in a compliant way.

CT deregistration is the only formal way for a business to end its obligation to pay corporate taxes in the Emirates. Even when a company is in the process of closure, it must meet all the CT payment and filing requirements. Businesses should seek support from reliable corporate tax consultants in Dubai to handle the liquidation process smoothly.

If you’re not completely aware of the latest deregistration regulations and processes, this blog can help. Keep reading, as we will guide you on how you can easily handle this important procedure and keep yourself protected from any legal issues and penalties.

Situations Leading to Corporate Tax Deregistration

We discussed above that corporate tax deregistration in the UAE is a formal process that every business must follow when ending its legal operations. Companies must understand that deregistration is not automatic. This means even if you cease operations, stop generating income, and close your physical location, your company will remain liable for corporate tax filings and potential penalties. So, you need to follow the required procedure to officially remove your business as a taxable entity from the FTA records. Here are common situations when a company needs to apply for deregistration with the tax authority:

1. Closing Down the Business

The most common reason for which most businesses in the UAE apply for corporate tax deregistration in the Emirates is when they decide to close down their operations. This simply means they have decided to stop all business operations. So, they need to go through an official liquidation procedure to remove themselves as a taxable entity from the FTA’s records.

2. Modifications of Corporate Structure

If businesses made major changes in their corporate structure, like a merger, changes in the business’s legal form, or any other modification that can affect their tax status. Then deregistration becomes mandatory for them.

3. Transfer of Ownership

Another situation where corporate tax deregistration becomes necessary for companies is when they make any major change in the ownership or sale of the business. It simply means that when the original owner sells the company to a new owner, the obligation to pay tax must be on the new owner. However, this responsibility can only be shifted when the old owner deregisters itself from the FTA records.

4. Miscellaneous Situations

When a business no longer makes any taxable supply and has decided not to be involved in that in the future, it needs to deregister itself. Moreover, if your income falls below the registration eligibility limit, you need to follow the deregistration procedure. Another situation can be when a company officially moves its legal base of operations out of the Emirates. If your company is not registered with FTA for CT, but you’re closing down its operations, you need to file your tax return. Only then can you apply for deregistration and ensure your business’s compliance with required guidelines.

Specific Timelines & Requirements for CT Deregistration

Generally, businesses need to apply for corporate tax deregistration in the UAE within three months of when they decide to stop their legal operations. However, this specific timeline is variable for different entities.

Natural Persons (Individuals): They must submit their applications within three months from the date they stop all business activities.

Legal Persons (Corporate Entities): They need to apply within three months of the date when their companies ceased to exist as a taxable entity due to merger, dissolution, or other reasons.

You can take help from trusted corporate tax consultants in Dubai to handle your CT deregistration process. They are well-versed in all requirements and can help you easily go through this formal process. Your application for deregistration can only be approved if you meet the following requirements:

Firstly, you need to file all pending tax returns, including a final tax return up to the closing date.
You also need to clear all unpaid corporate tax debts and attached penalties.
You need to provide necessary documentation, such as liquidation papers, evidence of a merger or sale, and license cancellation proof.

Penalties for Non-Compliance

If you are a business owner planning to stop your legal operations or need to apply for CT deregistration for other reasons, you need to follow a formal process. FTA handles this process, so you need to ensure you meet all deregistration requirements. You can hire a trusted provider of corporate tax and VAT services in Dubai who can manage this for you. However, if you fail to comply with any CT deregistration guideline, you can face penalties, including:

If you fail to submit your CT deregistration application within the three-month deadline, you can face a penalty of AED 1,000. Along with other monthly penalties, the penalty for late submission can add up to AED 10,000.
The FTA also has the power to deregister any individual or business that doesn’t meet the required compliance rules. Moreover, the tax authority can also take strict administrative action against them.

Steps for Corporate Tax Deregistration in the UAE

Businesses must work with professional corporate tax consultants in Dubai to avoid any mistakes that can lead to severe legal issues and penalties. Reliable tax consultants make sure all the financial records are properly submitted to the FTA and other requirements are also met. They can help you with faster and fully compliant CT deregistration in the Emirates:

You need to log in to your account on the EmaraTax portal.
Next, you need to choose the business you want to deregister and then select the deregister option under the corporate tax section.
Now you need to enter the date of the event that triggers the need for deregistration. You can select the particular reason for closing down from the available options.
After that, you need to collect all the required documents, like a copy of a valid trade license, financial statements, proof showing selling, ownership transfer, and merger, and others.
You must carefully review all the information in the application and then tick the declaration box. After confirming accuracy, you need to submit your application to the FTA.
Then the tax authority will review your application and the documents submitted. The approval of CT deregistration can take up to 30 business days.
Upon approval, the FTA will issue a tax deregistration certificate, which will confirm the official cancellation of your business’s tax registration.

Arabian Wingz Makes UAE CT Deregistration Easy

UAE CT deregistration is necessary if you have decided to stop your business operations or if your company no longer meets the required tax registration requirements. Handling deregistration can be challenging, but you can make this process simpler with Arabian Wingz. We have a trusted name among the top corporate tax consultants in Dubai and can support you with a compliant and quick deregistration.

Our team knows all the steps and guidelines related to UAE CT deregistration, so you don’t need to worry about fines or legal issues.
We can help you prepare the necessary paperwork and can even handle filing and communication with the FTA.
Our experts have helped several businesses with smooth and fast CT deregistration. Moreover, we also promise financial guidance for your future plans.

Beyond CT deregistration, you can also contact us for professional VAT, transfer pricing, and accounting bookkeeping services UAE. We provide complete solutions for all your finance needs and tax obligations. Make Arabian Wingz your trusted partner and secure the right support for a compliant company closure.