Corporate Tax Deregistration in UAE - A&A Associate

Corporate Tax Deregistration in UAE

In the UAE’s changing business environment, there are numerous cases wherein businesses have to grapple with unprecedented circumstances. These may call for change in the legal structure or the termination of their activities. Against such circumstances, the corporate tax deregistration emerges as a beacon of hope, by allowing businesses to cease their liability of paying corporate tax augmented with corporate tax services in the UAE. 

 

The process of corporate tax deregistration in UAE is regulated and overseen by the Federal Tax Authority (FTA). Completing the deregistration process is not only compulsory for avoiding legal penalties but also ensures adherence to the guidelines established by the FTA. While this process can be initiated through the EmaraTax portal, it is advised to consult reliable corporate tax consultants in UAE to make the process even more seamless.      

Outline of the Corporate Tax Deregistration Process

  • Log into EmaraTax portal: Taxpayers can log into the EmaraTax platform with their UAE pass or login credentials, which ensures a simplified and secured login process. In case, a user forgets his/her password, they can reset it and be assured of a speedy recovery. 
  • Click on the Corporate Tax Tile: Once logged in, users are supposed to click on the ‘Actions’ button displayed under the Corporate Tax Tile on the taxable person dashboard to start the CT registration application.  
  • Filing the Application: The application has been segregated into different sections, and each section features a progress bar. The date and reason for business cessation, along with supporting documents are mandatory to enter. The information of the buyer or transferee needs to be mentioned, if applicable.    
  • Submitting the Application: Before making the submission, taxpayers need to carefully review the information entered, as post submission the FTA conducts an exhaustive examination. In addition, they may request further information if necessary. 
  • Arrival of Deregistration Confirmation: Once all the formalities have been completed, taxpayers with approved applications will receive a reference number. The FTA communicates the acceptance of pre-approved applications in such cases. Hence, taxpayers may have to submit a final tax return which will be initiated by the EmaraTax portal.

Complete Overview of Corporate Tax Deregistration

Stipulated Timeline 
  • A natural person gets 3 months from the date of business cessation to file the application. 
  • A judicial entity gets 3 months from the date of cessation, dissolution, liquidation or any other reason.  
Conditions for Deregistration 
  • A taxable entity has to file all the required CT returns, including the return for the period until cessation. 
  • Has to make payment of the due taxes. 
  • Required to make payment for the administrative penalties liable to be paid under the law.   

NOTE: Post the approval of the application, the process will be in effect from the date of cessation or the date mentioned by the FTA. In case of failure to comply with instructions outlined for the purpose of deregistration, the entity may have to incur further penalties. 

Reasons driving CT Deregistration

Amongst the numerous reasons for corporate tax deregistration, the one that remains most common is undoubtedly,  the closure of business which can be attributed to strategic decision, bankruptcy or even insolvency. Apart from this, in cases of changes in legal structure such as mergers, acquisition or conversion, companies have to deregister for corporate tax purposes. Nevertheless, situations involving transfer of ownership obligate new owners to register and previous owners to deregister. 

Effects of CT Deregistration

At the foremost, deregistering for corporate tax can lead to substantial cost-savings for businesses that are no longer operational or have transferred ownership. Secondly, with successful deregistration businesses are not obligated to submit corporate tax returns which can significantly simplify compliance regulations. Last but not least, deregistered businesses stand at a disadvantage, as they are unable to engage in certain business undertakings or reap government benefits.    

Given the complexity of corporate tax laws and regulations, it is paramount that businesses undertake the help of corporate tax services in UAE. These firms can help businesses follow the right procedures, whilst delivering essential knowledge about the possible implications. 

 

With A&A Associate’s expert tax consultants in UAE, you can be assured that the deregistration process will be carried out seamlessly. Our highly skilled team keeps up with all CT updates, ensuring accuracy and adherence to compliance regulations.          

     

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