VAT Deregistration can be mandatory or voluntary.
Mandatory Deregistration
A registered person must deregister mandatorily if at the end of any month the following occurs:
- The person ceases to make taxable supplies and does not intend to make
taxable supplies in the future 12 months.
- The annual supplies or expenses in the previous 12 months or future 30 days do
not exceed the voluntary registration threshold of AD 187,500.
Voluntary Deregistration.
A registered person may deregister voluntarily if at the end of any month his value
of taxable supplies in the previous 12 months does not exceed the mandatory
registration threshold. (Art. 22 of the VAT Law).
A person who has registered voluntarily for VAT must be registered for a minimum
of 12 months from the date of his registration before being able to apply for
deregistration. (Art. 23 of the VAT Law).
Taxable supplies for the above purposes are determined on the basis that no VAT
is chargeable on the supply (i.e. VAT exclusive).
The application for VAT deregistration must be made in electronic form as
prescribed by THE AUTHORITY and within 20 business days from when the
conditions for deregistration were met.
Mandatory deregistration will take effect from the last day of the tax period in
which the conditions for deregistration are met or from another date
determined by THE AUTHORITY. (Art. 14(3) of the Regulations).
Voluntary deregistration will take effect from the date requested by the registered
person or the date the request is made when no preferred date is mentioned. (Art.
In addition, a registered person cannot be deregistered if he has not paid any
outstanding VAT penalties and VAT liability in full and submitted all relevant VAT
returns. (Art. 14(5) of the Regulations).
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