UAE Corporate Tax Update: Deregistration Timeline

Introduction

Tax deregistration is the process by which a Taxable Person is deregistered from its registration with the Federal Tax Authority for corporate tax purposes. Further, this is typically done when a business ceases its operations. Then, the Taxable Person is no longer required to be registered for tax purposes. In the UAE, tax deregistration is only possible in specific circumstances. Therefore, it is crucial to understand the conditions under which it is allowed, the process to follow, and the timeline attached to it.

Circumstances for Tax Deregistration

Under the UAE CT Law, a Taxable Person can apply for deregistration if the business ceases its operations or business activity. According to Section 52 of the UAE Corporate Tax Law, the cessation of business or business activity means any of the following:

• Dissolution of business, or
• Liquidation of the business
• Any other way

It is essential to note that the CT deregistration process is not automatic. Further, it requires the Taxable Person to file an application with the Federal Tax Authority (FTA) to initiate the process.

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Timeline for UAE Corporate Tax Deregistration

The FTA has issued a decision which sets out the timeline for applying for CT deregistration. The timeline for filing an application for CT deregistration differs depending on whether the taxable person is a natural person or a legal entity.

1. Natural Person: For a natural person, the deadline to submit an application for CT deregistration is 3 months after the day the business was discontinued.
2. Juridical Person: For legal entities, the timeline is within three months from the date:
   1. Juridical Person ceases to exist
   2. Business ceases to exist
   3. Dissolution
   4. Liquidation
   5. Any other reason

Implementation of Decision of Timeline for Corporate Tax Deregistration

The decision related to the timeline for deregistration from UAE Corporate Tax shall be implemented from June 1^st, 2023.

Procedure for Deregistration

• Application through the prescribed form: To apply for CT deregistration, the taxable person is required to file a request with the FTA using the approved form. Moreover, the form should be completed accurately and should provide all the necessary information required by the FTA.
• Fulfilling all the dues: Once the application is received, the FTA will review the request. It will verify that all outstanding CT dues and administrative penalties have been settled. Further, the Taxable Person is required to discharge all pending CT dues and file CT returns for all periods up to the date of cessation.

Conclusion

In conclusion, Tax Deregistration is an important process that a Taxable Person must follow when it ceases its operations. The process is not automatic, and the Taxable Person must file an application with the FTA to initiate the process. Further, the timeline for applying for CT deregistration differs for natural persons and legal entities. Lastly, the Taxable Person must discharge all pending CT dues and file CT returns for all periods up to the date of cessation.

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