Does cancelling my trade licence automatically deregister me for VAT and corporate tax?

No. The licensing authority and the Federal Tax Authority are separate. Cancelling or not renewing your licence leaves both tax registrations open, and the deregistration clocks start running from the cessation event whether or not anyone tells you.

How long do I have to deregister for VAT in the UAE?

20 business days from the triggering event, under Article 14(1) of the VAT Executive Regulation (Cabinet Decision 52 of 2017, as amended by Cabinet Decision 100 of 2024). Triggers include the licence being cancelled, the business being wound up, stopping taxable supplies with none expected in the next 12 months, or turnover falling below the voluntary registration threshold.

What is the penalty for late deregistration?

AED 1,000 for the late application and AED 1,000 again on the same date each month, capped at AED 10,000, for each of VAT and corporate tax. They are separate penalties on separate registrations, so a late exit can cost up to AED 20,000 on a business with no revenue.

Do I still have to file a return when I deregister?

Yes. Article 14(7) of the VAT Executive Regulation requires all tax and administrative penalties to be paid and the final return to be filed. For corporate tax, outstanding returns and payments must be settled before the FTA approves the deregistration, which usually means a final period return.

Is there VAT on the assets I still own when I deregister?

Usually yes. Article 14(8) of the VAT Executive Regulation deems goods and services still forming part of the business assets to be supplied immediately before deregistration, so output VAT on remaining stock, vehicles and equipment falls into the final return.

How long must I keep records after closing the company?

Record-keeping obligations survive the company. Keep your books, tax invoices and correspondence for at least five years from the end of the financial year they relate to, in case the FTA reviews earlier periods.

Closing a UAE company: the two deregistration clocks nobody starts for you

Q: How long do I have to deregister for corporate tax in the UAE?

3 months. FTA Decision No. 6 of 2023, Article 2, made under Article 52(1) of Federal Decree-Law 47 of 2022, gives a juridical person 3 months from the date the entity ceases to exist, or from cessation of the business, dissolution or liquidation. A natural person has 3 months from cessation of the business or business activity.

Most guidance about UAE tax registration is about getting in. Almost nothing is written about getting out, which is where a quiet and entirely avoidable cost sits.

Here is the part that catches people. Cancelling your trade licence does not end your tax registrations. The licensing authority, whether that is a mainland department or a free zone, and the Federal Tax Authority are separate bodies with separate records. Nothing passes between them automatically. Your VAT registration and your corporate tax registration stay open, two clocks start on the day you cease, and no one sends a reminder.

Both clocks carry a penalty payable on zero revenue.

The two deadlines are different lengths

This is the trap. Both clocks start at the same event, but they run for different periods, so it is entirely possible to handle one correctly and be fined on the other.

Registration	Deadline	Starts from
VAT	20 business days	Licence cancelled, business wound up or liquidated, taxable supplies stopped with none expected in the next 12 months, or turnover below the voluntary threshold
Corporate tax	3 months	The entity ceasing to exist, cessation of the business, dissolution, liquidation or otherwise

VAT: Article 14(1) of the VAT Executive Regulation (Cabinet Decision No. 52 of 2017, as amended by Cabinet Decision No. 100 of 2024) requires a registrant to apply for deregistration "within 20 (twenty) Business Days of the occurrence" of any of the cases in the Decree-Law.

Corporate tax: Federal Tax Authority Decision No. 6 of 2023, Article 2, issued under Article 52(1) of Federal Decree-Law No. 47 of 2022, gives a juridical person 3 months from the date the entity ceases to exist, or from cessation of the business, dissolution, liquidation or otherwise. A natural person gets 3 months from cessation of the business or business activity.

Twenty business days is roughly four working weeks. If your licence lapsed quietly while you were deciding what to do next, that window may already be gone.

What being late actually costs

The penalty is the same shape on both registrations and it is charged monthly.

For VAT, the consolidated Cabinet Decision No. 40 of 2017 and its amendments sets the penalty for failing to submit a deregistration application within the timeframe at AED 1,000 in case of late submission of the application and on the same date monthly, up to a maximum of AED 10,000.

For corporate tax, Cabinet Decision No. 75 of 2023 and its amendments carries the identical structure for failure to submit a deregistration application within the timeframe specified in the Corporate Tax Law: AED 1,000, then monthly, capped at AED 10,000.

These are two penalties on two registrations. They stack. A late exit can cost up to AED 20,000, on a company that has stopped trading and has no income to pay it from.

The cost almost nobody mentions: VAT on what you still own

Deregistering is not only paperwork. Article 14(7) of the VAT Executive Regulation requires you to pay all tax and administrative penalties due and to file the final return. Article 14(8) goes further:

Any Goods and Services forming part of the assets of Business carried on by a Registrant shall be deemed to be supplied by him at a time immediately before his Tax deregistration.

In plain terms, the stock on your shelves, the vehicle in the company name and the equipment in the office are treated as if you sold them the moment before you deregistered, and the output VAT on them lands in that final return. A business winding down with unsold inventory can face a real VAT bill at exactly the point it assumed it was finished.

And the obligation that outlives the company

Closing does not clear your record-keeping duty. Books, tax invoices and correspondence should be kept for at least five years from the end of the financial year they relate to. The entity is gone; the ability to answer a question about it is not optional.

A clean exit, in order

Fix the date your business actually ceased. Every clock runs from it, so write it down and keep the evidence.
Deal with VAT first. It has the shorter window. Prepare the final return, account for the deemed supply of remaining assets, settle what is owed, and file the deregistration application within 20 business days.
Then corporate tax. Settle outstanding returns and payments, then apply within the 3 months. The FTA will not approve a deregistration while filings are outstanding.
Get the cancellation fee in writing before you sign anything. Cancellation and liquidation charges are rarely published up front, and they vary widely between authorities and free zones.
Archive the records for five years. Somewhere you will still be able to reach after the accounts are closed.

Sources

Federal Decree-Law No. 8 of 2017 on Value Added Tax, Article 21
Cabinet Decision No. 52 of 2017, the VAT Executive Regulation, Article 14(1), 14(7) and 14(8), as amended by Cabinet Decision No. 100 of 2024
Cabinet Decision No. 40 of 2017 on Administrative Penalties and its amendments, violation 4
Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, Article 52(1)
Federal Tax Authority Decision No. 6 of 2023 on the Tax Deregistration Timeline, Article 2
Cabinet Decision No. 75 of 2023 on Administrative Penalties and its amendments, violation 3

This guide is general information, not tax advice for your situation. Deadlines run from facts specific to your business.