A business must apply to deregister for VAT within 20 business days of no longer meeting the mandatory registration conditions — whether from ceasing operations, falling below the voluntary threshold, or liquidation — and file a final VAT return. Deregistering late, or without settling the final return correctly, is a common source of FTA penalties on businesses that assumed closing the trade licence was enough.

The FTA process of closing a VAT registration when a business stops making taxable supplies, falls below the relevant threshold, or ceases operations, including a final VAT return.

Who needs it?
Businesses liquidating or closing, companies whose taxable turnover has permanently fallen below the mandatory (or voluntary) threshold, and entities being merged into another VAT registration.

- Avoids the FTA's late-deregistration penalty

- Final return correctly captures output VAT and input recovery up to closure

- Clean closure of your FTA tax file alongside trade licence cancellation

- Confirms no VAT liability remains outstanding before you close the business

1. Confirm the deregistration trigger and the FTA's 20-business-day deadline

2. Prepare the final VAT return covering the period to deregistration

3. Settle any outstanding VAT payable and submit the deregistration application

4. Follow through to FTA confirmation and file closure

Cost Factor ~ Based on complexity of the final period's transactions and whether any prior filing gaps need resolving before deregistration is approved.

Timeline ~ Must be applied for within 20 business days of meeting a deregistration trigger; FTA approval typically takes 1–3 weeks once the final return is filed.

 You must apply within 20 business days of the date you stop meeting the registration conditions (e.g. ceasing to make taxable supplies), and missing this window triggers an FTA penalty. Trade licence cancellation alone does not deregister you for VAT.

2. Can I deregister for VAT if my turnover has just dropped, not because I closed?
Yes — if your taxable supplies fall below the mandatory threshold and you don't expect them to recover, you can (and generally should) apply to deregister, though it's optional if you're still above the voluntary threshold. We assess whether staying registered or deregistering is more favorable for your input VAT position.

3. Do I still owe VAT after I deregister?
 Any VAT due on your final taxable period must be paid, and in some cases VAT is due on assets still held at deregistration if input VAT was previously recovered on them. This is calculated and settled as part of the final return before the FTA confirms deregistration.