FTA: Ceasing to Make Taxable Supplies or a Drop in the Value of Said Supplies Below Dh187,500 in the Previous Consecutive 12 Months

The Federal Tax Authority (the “Authority”) explained that the Federal Decree-Law No. 8 of 2017 on Value Added Tax has defined the cases for tax de-registration. As such, if a registrant stops making taxable supplies or if the value of the taxable supplies made by the registrant over a period of 12 consecutive months is less than the voluntary registration threshold of AED 187,500 and it is not expected that the total value of the registrant’s anticipated taxable supplies or expenses subject to tax in the coming 30-day period will exceed the voluntary registration threshold, then the registrant must submit a de-registration application to the Authority within 20 business days of the occurrence of any of these cases using the Authority’s e-Services portal, knowing that failing to submit the de-registration application within the period specified in the tax legislation will lead to the imposition of administrative penalties as stipulated in the Cabinet Resolution No. 40 of 2017 on Administrative Penalties for Violations of Tax Laws in the UAE. 

This was the subject of a press release issued by the Authority today to clarify the conditions and procedures for de-registration for Value Added Tax, after more than a year of its implementation.

The Authority confirmed that registrants will not be de-registered unless they have paid all due taxes and administrative penalties and filed all required tax returns for the period in which they were registered as stipulated under the tax legislation.  

The Authority went on to assert that the UAE Tax System is based entirely on voluntary compliance by Taxable Persons, whether it being with regards to registration, filing Tax Returns and payment of due tax or de-registration, noting that these services are available free of charge.

The Authority also mentioned that these procedures can be completed within few minutes through simple steps via the e-Services portal, available 24/7 on the Authority’s website (www.tax.gov.ae), which was designed in accordance with international best practices to facilitate compliance with the tax obligations of taxable persons with the easiest and fastest technological means in order to provide guidance and raise tax awareness among all segments of the community.