Corporate Tax Cancellation Process: A Complete Guide

In the fast-evolving business landscape in the UAE, understanding the process of corporate tax deregistration is essential for companies that no longer wish to maintain their tax registration. Since the introduction of corporate tax, businesses must be proactive. Whether it’s due to cessation of business or business activity, restructuring, or a change in ownership, this process ensures compliance with tax laws and regulations.

What is Corporate Tax Cancellation?

Corporate tax deregistration in the UAE refers to the process of terminating a business’s registration with the Federal Tax Authority (FTA). When a business ceases to operate or undergoes a structural change, it must deregister from the UAE corporate tax system. By filing an application for corporate tax deregistration, the entity officially removes its Tax Registration Number (TRN) from the active registry.

Who Can Initiate Corporate Tax Cancellation?

• Business Owners: If a business decides to cease its operations or is involved in restructuring, the owner may initiate the cancellation.

• Tax Authorities: The FTA can also initiate cancellation if the business does not comply with the tax laws, or if there are significant lapses in reporting or payments.

Only businesses that are no longer actively engaging in taxable activities or undergoing liquidation are eligible to apply for cancellation.

How to apply for deregistration of Corporate Tax in the UAE

To apply for deregistration of Corporate Tax in the UAE, a business must submit a formal application through the EmaraTax portal within three months of ceasing business activities or the entity's dissolution. The corporate tax deregistration in UAE process is not automatic; failing to initiate CT deregistration manually can result in substantial administrative penalties starting at AED 1,000. Before applying, companies must ensure they have filed all required returns and settled any outstanding liabilities. Even entities that were never required to register for corporate tax but are now in liquidation must first register for corporate tax and settle their final filings before they can successfully complete the deregistration procedure.

Key Requirements for Corporate Tax Deregistration

To successfully deregister from corporate tax, businesses must meet several deregistration requirements in the UAE:

1. No Pending Liabilities: You must settle all corporate tax liabilities and administrative penalties.

2. File Corporate Tax Returns: All outstanding corporate tax returns for previous periods must be submitted.

3. Timing: You must apply for deregistration within three months (90 days) from the date of cessation of business or the date the entity ceased to exist. Failing to apply for deregistration within this window can lead to significant penalties.

Reasons for Corporate Tax Cancellation

Several factors can prompt a business to cancel its corporate tax registration. Some of the most common reasons include:

1. Cessation of Business: The business has ceased its operations and is no longer earning taxable income.

2. Liquidation: If the company is going through a legal liquidation process, the corporate tax registration must be canceled.

3. Change in Business Structure: A significant change in ownership or business activities may make the corporate tax registration redundant.

4. Merger/Acquisition: In the event of a merger or acquisition, the new entity may choose to cancel the previous registration.

Step-by-Step Guide to the Corporate Tax Cancellation Process

Navigating the complexities of corporate tax deregistration is easier when following the deregistration procedure established by the FTA:

1. Access the FTA Portal

Log in to the EmaraTax portal using your UAE PASS or login credentials. Once logged in, locate the Corporate Tax tile on the taxable person's dashboard.

2. Initiate the Request

Click the "Deregister" button under the corporate tax section. This will open the application for deregistration.

3. Submit the Corporate Tax Deregistration Application

Fill out the deregistration request, specifying the reason for deregistration (e.g., liquidation, merger). You must provide:

• Date of cessation of business.

• Supporting legal documents (liquidation certificates, board resolutions).

• Audited financial statements if requested.

4. FTA Review of Tax Liabilities

The FTA will conduct a review of tax liabilities and your compliance history. If everything is in order, they will approve the deregistration application to the FTA.

5. Final Return and Deregistration Certificate

The applicant must file a final return and pay any remaining corporate taxation dues. Once cleared, the FTA will issue a deregistration certificate, confirming the deregistration and the effective date.

Consequences of Corporate Tax Cancellation

Once you deregistering corporate status, your liability for paying corporate taxes for future periods ends. However, the FTA maintains the right to audit past records. Ensuring a clean tax tile within the taxable period is crucial to avoid future disputes.

What Happens After Corporate Tax Cancellation?

After the corporate tax cancellation process is complete, the business is relieved from tax obligations moving forward. However, it’s essential to handle any remaining liabilities:

• Outstanding Taxes: Ensure all taxes are settled before applying for cancellation.

• Final Returns: Businesses must submit a final tax return (GSTR-10) to close the account with the FTA.

• Revocation: If there are valid reasons, a business can request a revocation of cancellation within 30 days, using Form GST REG-21.

Revocation of Corporate Tax Cancellation

If a deregistration application was submitted in error, a business can request a revocation using Form GST REG-21 (or the equivalent UAE FTA form) within 30 days, provided they still meet the criteria to obtain a corporate tax registration.

Important Compliance and Filing Requirements

• Final Return: All businesses must file a final return (Form GSTR-10) to report any remaining taxes and provide a detailed record of assets and liabilities.

• Time Limits: Businesses are required to submit their final return within three months from the cancellation date.

• No Pending Liabilities: Ensure that no outstanding tax liabilities are left at the time of cancellation.

Portal Navigation for Corporate Tax Cancellation

The FTA Portal is the primary platform through which businesses can apply for corporate tax cancellation. Here is how you can navigate the portal:

1. Login to the FTA Portal

2. Go to Services → Registration → Corporate Tax Deregistration

3. Submit Application Form

4. Upload Supporting Documents

5. Track Application Status using ARN (Application Reference Number)

The ARN allows businesses to track the progress of their cancellation application.

Process for Corporate Tax Deregistration in the UAE

The process for corporate tax deregistration in the UAE is a mandatory legal requirement for UAE businesses that have ceased operations or no longer meet the threshold for being required to register for corporate. Since corporate tax is a direct tax on income, the deregistration of corporate tax ensures that a company from the UAE is no longer liable for future filings or payments. To begin, a taxable person must access the EmaraTax portal and use the corporate tax tile within their dashboard to initiate the corporate request. This regulations and the deregistration process involve filing a final tax return and settling all outstanding liabilities as established by the Federal Tax Authority (FTA).

Common reasons for corporate tax deregistration include the cessation of business, legal dissolution, or a change in corporate structure like a merger. Because the tax regulations and the deregistration timelines are strict—requiring submission within three months of the triggering event—many businesses need a review of tax compliance by tax professionals to avoid hefty penalties. Managing both corporate tax registration and deregistration correctly is essential for maintaining a clean record with the FTA and successfully closing a business chapter in the Emirates.

How Young and Right Can Help You with the Corporate Tax Cancellation Process

Navigating the corporate tax deregistration process in the UAE can be a complex task for businesses. Whether you're looking to cancel corporate tax registration due to the cessation of business or a significant change in business structure, understanding the ins and outs of UAE corporate tax law is crucial. At Young and Right, we specialize in assisting businesses with corporate tax deregistration and ensuring compliance with UAE tax regulations every step of the way.

Corporate Tax Services Tailored to Your Needs

Our team of experienced corporate tax consultants offers comprehensive corporate tax services to guide you through the corporate tax deregistration process. If your business is no longer required to pay taxes in the UAE due to reasons such as cessation of the business or other significant changes, we can help you apply for corporate tax deregistration smoothly and efficiently.

Why Corporate Tax Deregistration Matters

The UAE corporate tax deregistration process ensures that businesses comply with the UAE tax laws when they cease operations or are undergoing structural changes. Whether it’s applying for tax deregistration due to business closure or restructuring, businesses must follow the correct procedure to avoid ongoing tax liabilities. Young and Right will ensure that your company is fully compliant, reducing the risk of penalties or legal issues.

Conclusion

Understanding the corporate tax cancellation process is essential for businesses in the UAE that are either ceasing operations or undergoing restructuring. By following the correct steps and complying with FTA regulations, businesses can avoid penalties and ensure a smooth transition. For expert assistance with corporate tax cancellation, Young and Right offers comprehensive services to guide you through each step of the process.