Dubai’s large and thriving business environment is not only good news for the UAE economy and its entrepreneurs. But a community of successful enterprises also means high demand for business support services.
This can be fairly common offerings such as bookkeeping and marketing, or more niche support tailored to the region. While Dubai has a relatively clear and simplistic tax system, complying with all relevant regulation is paramount. Inefficiency here can not only lead to sanctions, but it may also lead to unnecessary costs.
That’s where companies such as corporate tax de-registration services in Dubai come in. Such organisations will help ensure that you are only registered – and therefore potentially liable – for tax when you need to be. So, if you’re running a business out here or looking to start one, here’s why it’s always a good idea to seek expert advice when it comes to all things tax-related.
What is corporate tax deregistration in Dubai, UAE?
In essence, corporate tax deregistration in Dubai is the process of informing the relevant authorities that an operation or activity has ceased and is no longer liable, or in some cases, able to pay tax in the UAE.
It is the responsibility of the taxpayer, or representative or the taxpaying entity, to deregister for corporate tax with the UAE Federal Tax Authority (FTA).
It is vital to inform the FTA that you have ceased trading or that your circumstances have changed to ensure that your business is no longer liable for corporate tax. However, it is important to note that organisations are still subject to filing and paying corporate tax while in the process of ownership transfer or a company being wound up.
To successfully deregister for corporate tax, the legal entity in question must satisfy several conditions. Therefore, before submitting your application, you should first ensure that there are no outstanding corporate tax liabilities, all pending corporate tax penalties are paid and all relevant tax returns have been filed.
When to apply for corporate tax deregistration in Dubai, UAE?
In most cases, you must inform the FTA that you wish to be deregistered for corporate tax within three months of the relevant change to your circumstances. For natural persons, this typically means within three months of the cessation of the business or business activities. For judicial persons, this typically means within three months of the legal entity ceasing to exist, whether by liquidation, dissolution or anything else.
The deregistration process usually takes up to 30 days from the date of application. However, the FTA may require more information in some cases. If supporting information is not supplied within 60 days of a request from the FTA, the application may be rejected. Should this happen, you will need to resubmit your application for deregistration.
To ensure that this process goes smoothly and is undertaken in a timely fashion, it is a good idea to work with an expert tax deregistration services in Dubai. Such firms can remove the headache of informing relevant authorities and offer peace of mind that deregistration has been carried out correctly in line with all relevant regulations.
Many firms that offer corporate tax deregistration services are also experts in other areas of tax filing, planning and management. So should you need support at any other stage of the tax process, from submitting returns to calculating liability, it is always worth engaging with a local expert that has your best interests at heart.
Requirements for UAE Corporate Tax Deregistration
One of the most common reasons for tax deregistration is the closure of a business. This could be due to liquidation, dissolution or any other valid reason. However, a taxable entity “ceasing to trade” does not necessarily mean that a company is to be closed.
It could also mean that a tax-registered person is no longer liable for an organisation’s corporate tax responsibilities. This usually occurs when a business is transferred from one person or group of people to another. What’s more, if a taxable entity is merged with or acquired by another taxable entity, the original entity should apply for deregistration.
Structural changes may also require deregistration. For example, if a company changes its legal structure, it should usually also apply for corporate tax deregistration. Deregistration will also be required if a company is redomiciled to its country of origin.
There may be other reasons requiring deregistration too. Most commonly, this would be a company that is not registered for corporate tax going through the liquidation process. In this scenario, the legal entity would have to register and then deregister for corporate tax to ensure compliance.
Fines and penalties for late corporate tax deregistration
As with most matters relating to tax, there are potential penalties for failing to comply with the corporate tax deregistration process. Should you fail to deregister your business within three months of the appropriate date, you will be liable for a fine of AED 1,000 for every month you are overdue up to a maximum of AED 10,000.
The FTA also reserves the right to sanction businesses and representatives in other ways if a legal entity violates any requirements of the corporate tax deregistration process.
Why work with Creative Zone for Corporate Tax Deregistration in Dubai, UAE
Applying for corporate tax deregistration in Dubai can feel like a daunting process – particularly if you’re new to the region.
That’s why selecting the right partner is a critical step when looking to launch or grow a business out here. As one of the Middle East’s most trusted advisors regarding business setup in Dubai, Creative Zone has been empowering entrepreneurs, SMEs and high-net-worth families with comprehensive support since 2010. With a strong reputation for assisting businesses locally and globally, we offer a complete range of solutions for all your business needs.
When you work with us, you get fast, reliable and unbiased advice on your unique business setup requirements. We can help you choose the right kind of license for your business activity and take you through the entire process from start to finish.
We’re here to assist every step of the way. No matter your chosen activities, legal entity or visa requirements, we’re on hand with support, guidance and expertise. So, if you’re looking to lay the foundations for life in the UAE, Creative Zone is your ideal starting point.
Contact us today to kickstart your business in Dubai.
