Managing corporate tax in Dubai requires careful attention to compliance, especially when your business ceases operations or undergoes structural changes. An essential step in this process is corporate tax deregistration, which ensures your business is officially released from tax obligations under UAE’s Federal Tax Authority (FTA).
Back to topWhat is Corporate Tax Deregistration?
Corporate tax deregistration is the process of informing the FTA that your business is no longer liable for corporate tax. This is typically required when a business stops operating, merges with another entity, changes ownership or legal structure, or undergoes company liquidation in Dubai.
The application must be submitted within three months of the event triggering deregistration. For individuals, this means three months from the cessation of business activity. For legal entities, it is three months from company liquidation or dissolution.
Back to topRequirements to Deregister
Before you apply to deregister, the business must satisfy certain conditions. They are:
- Having no outstanding corporate tax liabilities
- Filing all tax returns
- Ensuring all corporate tax penalties are fully paid
If these requirements are not met, the FTA may reject your application. Additionally, if the FTA requests supporting documents, they must be submitted within 60 days.
Back to topWhen Should a Business Deregister?
The most common reason for deregistration is the closure of the business, due to reasons such as company liquidation in Dubai. However, a company “ceasing to trade” does not always mean business closure.
You must also deregister when:
- Company undergoing liquidation is not registered for corporate tax: In this case, you will need to register your company for corporate tax in Dubai and then deregister to ensure compliance.
- Business is being transferred to new ownership: When a business is transferred from a person or group of people to another, the tax-registered person will not be liable for the company’s tax responsibilities anymore. Thus, they must apply to deregister.
- Companies merge: When a business is merged or acquired by another business, the original business must apply for corporate tax deregistration in Dubai.
- Company undergoes restructuring: Structural changes, such as changes to legal structure of a company, necessitate deregistration.
If you are unsure about the corporate tax registration process, Commitbiz corporate tax consultants in Dubai can help you navigate the legal requirements.
Back to topPenalties for Late Deregistration
Failing to deregister within the required 90 days can result in a fine of AED 1,000 per month, up to a maximum of AED 10,000. The UAE Federal Tax Authority may also impose further sanctions for non-compliance.
Back to topWhy Choose Commitbiz?
Whether you're planning company liquidation, restructuring, or exiting the market, Commitbiz can help. We ensure all your corporate tax liabilities are cleared and guide you through the UAE Federal Tax Authority process for a smooth deregistration. Our experts ensure you avoid fines, stay compliant, and make a hassle-free exit. Get in touch with us today!
Back to topShould all companies register for corporate tax in Dubai?
Yes, all companies should register for corporate tax in Dubai to ensure compliance.
How long does the corporate tax deregistration process take?
The deregistration process usually takes up to 30 days from the date of application.
Is deregistration required when a company is relocated to its country of origin?
Yes, deregistration is required when a company is relocated to its country of origin.
