Everything about Corporate Tax Deregistration You Need to Know

By Kitaab on May 08, 2025

If you're a founder closing a side business, scaling down, or simply no longer earning enough to be taxed, you might assume you're done with corporate tax. But there’s one final step many overlook: corporate tax deregistration.

Think of it as your official exit, and without it, you're still on the hook. This is a formal, legal process that removes your business from the UAE’s tax system. Without it, you're still expected to file returns and could face unnecessary penalties. Whether you’ve shut down or merged your entity, corporate tax deregistration ensures a clean and compliant exit.

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Who Should Deregister from Corporate Tax?

You’re expected to apply for corporate tax deregistration if:

Your business has permanently ceased operations.
Your taxable income has dropped and stayed below AED 375,000.
Your company is undergoing liquidation, merger, or ownership restructuring.
You’ve shifted to a business activity or jurisdiction that no longer falls under UAE Corporate Tax obligations.

Why Is It Important to Deregister?

Before you close the chapter on your business, ensure you’ve crossed the final compliance hurdle, which is deregistration. If you're no longer earning taxable income but stay registered, you're still expected to file returns. Miss those, and penalties apply, even if no tax is due. By formally exiting the system, you:

End your legal obligation to submit corporate tax filings
Avoid late fees and non-compliance penalties
Enable smoother liquidation or restructuring
Keep your FTA record clean for any future ventures

In short, deregistration is how you tie up loose ends and avoid paying for a business you’re no longer running

When Should You Apply for Deregistration?

Timing is crucial when it comes to corporate tax deregistration. The Federal Tax Authority (FTA) expects businesses to apply for deregistration within 3 months of the event that triggers the need for it, whether that's ceasing operations, dropping below the taxable income threshold, or undergoing a structural change. Missing this deadline can result in unnecessary penalties or complications, as your company will still be considered active in the tax system. To avoid delays or fines, it’s best to apply as soon as the triggering event occurs. Proactively handling this will keep your exit smooth and compliant.

Step-by-Step Process To Corporate Tax Deregistration

Deregistering from corporate tax with the FTA is straightforward, but it requires some attention to detail. Follow these steps:

Log into EmaraTax: Access your FTA account via the EmaraTax portal.
Select the Deregistration Option: Choose the corporate tax deregistration option under the tax registration tab.
Submit Your Final Tax Return: Before applying for deregistration, ensure that your final tax return is filed. This confirms that there are no outstanding liabilities.
Upload Required Documents: Depending on your business type and reason for deregistration, you may need to submit supporting documents such as:

Proof of business closure
Liquidation documents (if applicable)
Ownership change or restructuring documentation (if applicable)

5. Submit Your Application: Once everything is in place, submit the application for deregistration. The FTA will review and approve it if everything is in order.

Common Pitfalls to Avoid

While the deregistration process is straightforward, businesses often make mistakes that can lead to delays or rejection. Here are some common pitfalls to avoid:

Missing the Final Tax Return: You must file your final tax return before deregistration. Failing to do so will result in your application being rejected.
Assuming Automatic Deregistration: If your business has ceased operations or is below the taxable income threshold, corporate tax deregistration isn’t automatic. You must initiate the process.
Incomplete Documentation: Always double-check that you’ve uploaded all required documents. Missing paperwork can slow down the approval process.
Missing the 3-Month Deadline: The FTA allows 3 months from the event triggering deregistration. Exceeding this window can lead to fines or penalties for non-compliance.

Taking the time to avoid these errors will make the deregistration process much smoother and more efficient.

Secure Your Exit with Corporate Tax Deregistration

Corporate tax deregistration may seem like a small step, but it’s a vital one for businesses transitioning out of the tax system. Whether you’re closing your business, restructuring, or simply no longer meet the taxable income threshold, deregistration ensures you’re not burdened with unnecessary filings or penalties. Don’t risk non-compliance or costly fines; act within the 3-month window and ensure your deregistration is smooth and timely.

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