When can a business deregister from VAT?

Article 14 – Tax Deregistration 9 1. The Registrant must apply to the Authority for Tax deregistration in the cases mentioned in the Decree-Law, within 20 (twenty) Business Days of the occurrence of any of them. 2. The Authority shall accept the Registrant’s application for Tax deregistration where the following two 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 (twelve) 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 (thirty) days, are not expected to exceed the Voluntary Registration Threshold. 3. If the Tax deregistration application is approved, the Authority shall deregister the Registrant with effect from the last day of the Tax Period during which the Registrant has met the conditions for deregistration or from such other date as may be determined by the Authority. 4. Where the Authority is satisfied that the conditions in Clause 2 of this Article are met, and the Registrant has not applied for Tax deregistration or has submitted a request but has not completed its procedures, the Authority shall deregister the Registrant with effect from the date on which the Authority became satisfied that the conditions have been met or from any other date determined by the Authority. 5. Where a Registrant applies for Tax deregistration due his Taxable Supplies falling below the Mandatory Registration Threshold, the Authority shall, after approving the application, deregister him with effect from: a. the date requested by the Registrant in the application, b. the date on which the application is submitted if the Registrant did not indicate the preferred Tax deregistration date, or c. any other date specified by the Authority. 6. Where the Authority has deregistered a Registrant for Tax, it shall notify him, within 10 (ten) Business Days of the decision to deregister, of the effective date of the deregistration. 9 Article amended as per Cabinet Decision No. 100 of 2024. Cabinet Decision No. 52 of 2017 and its amendments – Unofficial translation 12 7. Where a Registrant applies for Tax deregistration, he shall pay all Tax and Administrative Penalties due and file the final Tax Return as due under the DecreeLaw and the Tax Procedures Law. 8. Any Goods and Services forming part of the assets of Business carried on by a Registrant shall be deemed to be supplied by him at a time immediately before his Tax deregistration, and any Tax due thereon shall be included in the final tax return, unless the Business is carried on by the Legal Representative pursuant to the provisions of the Tax Procedures Law. 9. The Tax deregistration shall not absolve a Person from having to comply with the provisions of the Decree-Law and this Decision, including filing another Tax Registration application when the Tax Registration requirements are met. Article 14 (bis) - Tax Deregistration to Protect the Integrity of the Tax System 10 1. The Authority may issue a decision to deregister a Person for Tax if the Authority determines that maintaining such Tax Registration may prejudice the integrity of the Tax system, provided that any of the following conditions is met: a. the Registrant no longer meets the Tax Registration requirements according to the provisions of the Decree-Law, b. the Registrant has not submitted an application for Tax deregistration to the Authority as specified under Clause 1 of Article 21 of the Decree-Law, or the Registrant has initiated a Tax deregistration application with the Authority but has not completed such application, c. any other conditions specified by the Authority. 2. The Authority shall verify that the Person is not eligible for Tax Registration before deregistering him. 3. Tax deregistration initiated by the Authority shall not absolve a Person from having to comply with the provisions of the Decree-Law and this Decision, including filing another Tax Registration application when the Tax Registration requirements are met. 10 Article added as per Cabinet Decision No. 100 of 2024. Cabinet Decision No. 52 of 2017 and its amendments – Unofficial translation 13

Article 21 - Tax Deregistration Cases12 1. A Registrant shall apply to the Authority for Tax deregistration in any of the following cases: a. If he stops making Taxable Supplies. 12 Article amended as per Federal Decree-Law No. 18 of 2022. Federal Decree-Law No. 8 of 2017 and its amendments – As published by the Ministry of Finance 13 b. If the value of the Taxable Supplies made over a period of 12 consecutive months is less than the Voluntary Registration Threshold and the Registrant does not meet the condition stipulated in Clause 2 of Article 17 of this DecreeLaw. 2. The Authority may, in accordance with the controls and conditions specified in the Executive Regulation of this Decree-Law, issue a Tax deregistration decision, if the Authority finds that continuity of such Tax Registration may prejudice the integrity of the Tax system. 3. Tax deregistration shall not result in the relinquishment of the Authority’s right to claim any Due Tax or Administrative Penalties.

they were members. That means that even when a business has left a tax group, they remain liable for VAT and penalties for the period of membership. 4.6. How to register for VAT The VAT registration form and tax group registration form are available via the online portal on the FTA website. This can be completed by the taxable person or their appointed tax agent. 4.7. Failure to notify of the requirement to register If a taxable person fails to notify the FTA of a requirement to register for VAT within the specified timeframe, the FTA may register the person from the date they were required to be registered. The taxable person will remain liable for any VAT due to be accounted for on taxable supplies made since the effective date of the registration, and will be subject to applicable penalties. 4.8. Deregistration A taxable person must notify the FTA of the requirement to deregister within 20 business days from the end of the month in which any of the following occurs:   the taxable person ceases making taxable supplies; or the value of the taxable person’s taxable supplies in the preceding 2 calendar months is less than the Voluntary Registration Threshold. The FTA will deregister the taxable person if they are satisfied that:   the taxable person no longer makes taxable supplies and does not intend to make any taxable supplies in the next 12 months; or the value of the taxable person’s taxable supplies or taxable expenses over the previous 12 month period is less than the Voluntary Registration Threshold and the taxable person does not anticipate making taxable supplies or incur taxable expenses in excess of the Voluntary Registration Threshold in the next 30 days. The taxable person will be deregistered with effect from the last day of the tax period during which they met the conditions for deregistration, or from any other date as may be determined by the FTA. In order to be deregistered the person must be up to date with their tax returns and associated payments. Where a taxable person is not required to deregister, the person may apply for a voluntary deregistration if the total value of their taxable supplies in the previous 12 months was less than the Mandatory Registration Threshold. However, if the person has voluntarily registered for VAT, voluntary deregistration will not be possible until 12 months have elapsed since the date of registration. Requests for deregistration should be made via the online portal available on the FTA website. 16 VAT Guide | Taxable Person | VATG001