UAE Clarifies Corporate Tax Steps for Businesses Closing Down

UAE, 8 May, 2025 : Businesses shutting down in the UAE must ensure full compliance with tax deregistration procedures, even after submitting final liquidation reports. The Federal Tax Authority (FTA) requires companies to deregister for all tax regimes, including VAT and corporate tax, to avoid penalties.

Even entities closed before corporate tax took effect may be contacted by the FTA portal due to system checks. Businesses must respond formally and re-submit closure documents if needed.

A Dh10,000 penalty applies for failing to register for corporate tax within three months, though recent waivers may apply. However, delays or incomplete deregistration—even with zero activity—can trigger fines and block formal closure.

Complications may also arise from duplicate FTA profiles or entity upgrades, such as moving from a sole establishment to an LLC, which can confuse the portal and require separate accounts for VAT and corporate tax.

Experts advise businesses to proactively review their FTA accounts and seek guidance to ensure clean deregistration.