The FTA (Federal Tax Authority) has recently cleared concerns about the conditions and procedures regarding de-registration from VAT, since it’s implementation in 2018. This is especially important for smaller businesses that are nearer to the tax threshold, as an administrative fine is liable to the firm is this law is not complied with.
FTA conclusively explained that if a registered firm stops making taxable supplies or if the value of the taxable supplies fall below the voluntary threshold of AED 187,500 for 12 consecutive months, and if this status is not expected to change within 30 days after this time period, the VAT registered firm must apply for de-registration from the tax authority. Furthermore, this application must be filed within 20 days of the cases these conditions being met.
Although this may be, there are certain exceptions to be considered for these businesses. For example, a firm will not be allowed to de-register from VAT till all due tax amounts and administrative penalties have been paid in full and all tax returns filed.
Currently, the UAE tax system is based almost entirely on the voluntary compliance of firms in the country, with regards to all of the tax services which is primarily accessed through the FTA’s online portal. However, if under federal investigation, and there is evidence of non-compliance to the federal laws in this domain, there may be heavy penalties issued.
While the tax has been around for a full year, there are still many firms in UAE that find themselves unfamiliar with the complex tax laws involved in this VAT process. MSI Alnoman & Ravi has experts in this field who are qualified to help with the various tax services to guide and train your business through the tax field and enable you to make more informed in this vital part of a business in UAE. Being trained in this field and ensuring proper compliance will allow your firm to better use the fast FTA e-services portal and improve efficiency in filing tax returns and paying tax amounts.