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How to deregister for UAE corporate tax and VAT: the 3-month and 20-business-day deadlines, final returns, late penalties and why the FTA charges no fee.
You must apply to deregister for UAE corporate tax within 3 months of the business ceasing, being dissolved or liquidated. For VAT, you must apply within 20 business days of the event that triggers it, such as stopping taxable supplies. The FTA charges no fee for either, but it will not complete deregistration until every return is filed and all tax and penalties are paid. Applying late costs AED 1,000, then AED 1,000 a month, up to AED 10,000 for each tax.
Many owners treat closing a company as a licensing job. You call the free zone or the economic department, cancel the trade licence and hand back the visas. Then, months later, an EmaraTax notification arrives with penalties still accruing against a business that no longer exists.
Corporate tax deregistration in the UAE runs alongside the licence cancellation, not after it. VAT has its own triggers and its own deadline. This guide sets out when each obligation applies, the order to tackle them in and where the real money goes.
When you must deregister for corporate tax and VAT
Corporate tax and VAT are two separate registrations with two separate sets of triggers. Leaving one does not take you out of the other.
For corporate tax, Article 52 of Federal Decree-Law 47 of 2022 ties deregistration to the business ceasing, by dissolution, liquidation or otherwise. The FTA's deregistration service lists these reasons:
dissolution, liquidation or closure
sale of the business
a merger
re-domiciliation out of the UAE
a change in the place of effective management
closure of a permanent establishment
a duplicate TRN
Re-domiciliation catches people out because the company keeps operating, just somewhere else. If that is your plan, read about moving a holding company by re-domiciliation before you file anything.
VAT works on turnover under Articles 21 to 23 of Federal Decree-Law 8 of 2017. You must apply if you stop making taxable supplies, or if your taxable supplies over 12 consecutive months fall below AED 187,500 and your taxable expenses are below that figure too. You may apply if they fall below AED 375,000. Voluntary registrants cannot deregister within 12 months of registering.
A consultancy that drops to AED 150,000 a year in taxable sales may have to leave VAT. It still stays registered for corporate tax for as long as it keeps trading.
Deadlines and late deregistration penalties
Corporate tax | VAT | |
|---|---|---|
Trigger | Cessation, dissolution, liquidation, sale, merger, re-domiciliation and similar events | Stopping taxable supplies, or supplies below AED 187,500 over 12 months |
Deadline to apply | 3 months from cessation | 20 business days from the trigger |
Late deregistration penalty | AED 1,000, then AED 1,000 each month, up to AED 10,000 | AED 1,000, then AED 1,000 each month, up to AED 10,000 |
FTA processing time | Aims for 40 working days | 30 business days |
Fee | None | None |
The corporate tax penalty comes from Cabinet Decision 75 of 2023, as amended. The VAT figure comes from Cabinet Decision 40 of 2017, as amended by Cabinet Decision 129 of 2025, which came into force on 14 April 2026. Treat 20 business days as your VAT limit and apply as soon as the trigger happens.
Final returns carry their own exposure. A late corporate tax return costs AED 500 a month for the first 12 months and AED 1,000 a month after that. A late VAT return costs AED 1,000, or AED 2,000 for a repeat within 24 months. Late payment penalties apply on top of these, and the UAE corporate tax filing deadlines and late penalties guide sets out how they build up. If penalties have already landed, check how the corporate tax penalty waiver works.
Closing a UAE company: the order of steps
Getting the sequence right is what keeps closing a company in the UAE tax-clean. For a company that is shutting down, work through these steps in order:
Decide and date it. Pass a board or shareholder resolution with a clear cessation date. Every deadline that follows runs from this date.
Bring the books up to date. Prepare financial statements to the cessation date.
Start liquidation and licence cancellation with your licensing authority.
Deregister for VAT. Apply within 20 business days of stopping taxable supplies. File the final VAT return within 28 days of the effective date.
Deregister for corporate tax within 3 months of cessation. File the return for the final period and attach the financial statements.
Pay everything outstanding, including tax and any penalties, so the FTA can approve both applications.
Complete licence cancellation once your authority is satisfied.
Archive the records with a named person who will hold them after the company is gone.
Each licensing authority runs its own liquidation and cancellation process and sets its own fees. That applies whether you sit on the mainland under an economic department or in a free zone. Check early whether your authority needs anything from the FTA, such as proof of deregistration, before it cancels the licence. The EmaraTax guide covers the portal side of steps 4 and 5.
Final returns and what the FTA needs before it lets you go
For corporate tax, the FTA will not approve deregistration until every return up to and including the cessation date is filed. All tax and penalties must also be paid. Your financial statements up to the cancellation date form part of the application. The FTA may also deregister you itself, with effect from the cessation date or a date it sets.
VAT has an extra step that surprises people. Any business assets you still hold, such as laptops, vehicles or stock, are treated as supplied just before deregistration. The VAT on them goes into your final return, which is due within 28 days of the effective date. EmaraTax issues the certificate only after that return is approved and everything is paid.
Watch for information requests. If the FTA asks for more detail on a corporate tax application and you do not reply within 60 calendar days, it may reject the application.
Documents by reason for corporate tax deregistration:
Liquidation or closure: licence cancellation document and financial statements to the cancellation date
Sale: the sale agreement
Merger: the merger agreement
Re-domiciliation: a certificate of continuation
Change of effective management: a directors' resolution
What deregistration costs
Corporate tax deregistration charges from the FTA are zero, and the same goes for VAT. The bill comes from everything around the application. The main cost drivers are:
Licensing authority fees: each authority sets its own cancellation and liquidation charges
Liquidator or auditor: needed where your authority requires one
Final accounts: financial statements to the cessation date
Final returns: preparing the last corporate tax and VAT filings
VAT on remaining assets: the deemed supply in the final VAT return
Unpaid tax or penalties: often the largest line if filings have slipped
Any figure a provider quotes you is indicative. The real cost depends on how many periods are still open and what state the books are in.
A company with clean monthly bookkeeping might need one set of final accounts. A company that has not reconciled anything since registration could need two years rebuilt before anyone can file. If your licence is close to expiry while you wind down, see what UAE licence renewal costs and what happens if you miss it.
After deregistration: records and the FTA's 5-year window
A deregistration certificate does not close the FTA's file. The authority can generally still audit and assess your past periods for 5 years after the end of the relevant tax period. Article 21(3) of the VAT law states plainly that deregistration does not remove the FTA's right to claim tax or penalties. Any unpaid amount survives the company.
Data mismatches can prompt FTA questions. Examples include VAT turnover that does not match the revenue in your corporate tax return, or a final period with unusually large input tax claims. A clean, consistent final set of filings is your best protection.
Keep corporate tax records for 7 years after the end of the tax period and VAT records for 5 years (15 years for real estate). Before the company is dissolved, decide who will hold them. That could be a former director, a shareholder or your accountant. It should be someone the FTA can reach, who can produce invoices, contracts and bank statements if a query arrives in 2029.
Frequently asked questions
Is there a fee to deregister for corporate tax in the UAE? No. The FTA charges nothing to deregister for corporate tax or VAT through EmaraTax. Your costs come from licensing authority fees, final accounts and any outstanding tax or penalties.
Can I deregister for VAT but stay registered for corporate tax? Yes. The two registrations are separate. If your taxable supplies fall below the threshold, you can leave VAT and remain registered for corporate tax while you keep trading.
What happens if I cancel my trade licence and do nothing with the FTA? Your registrations stay open, and late deregistration penalties start at AED 1,000 and rise by AED 1,000 a month to AED 10,000 per tax. Missed returns and unpaid tax add further penalties. The FTA may also deregister you itself, but that does not wipe what you owe.
Do I still file a corporate tax return for my last period? Yes. You must file a return for the period up to and including the cessation date. The FTA will not approve deregistration without it.
How long does the FTA take to approve deregistration? The FTA aims for 40 working days for corporate tax and 30 business days for VAT. Information requests can extend this, and failing to answer a corporate tax request within 60 calendar days can lead to rejection.
Does deregistering stop the FTA auditing my old returns? No. The audit and assessment window carries on, and the FTA keeps its right to collect tax and penalties.
Closing a company well comes down to sequencing. Fix the cessation date, get the books current, file both deregistrations inside their deadlines and pay everything before the licence goes. If you want that run as one coordinated project, Cosmos keeps the books to the cessation date and files the final UAE corporate tax and VAT returns and both deregistration applications through an FTA-registered tax agent. Cosmos is not a liquidator or a law firm, so where your authority requires a liquidator you appoint one separately. Book a call to plan the closure.
