How the Latest UAE VAT Amendments Affect Tax Registration and Deregistration in 2025
Introduction: The UAE’s Evolving VAT Landscape
The United Arab Emirates (UAE) continues to strengthen its tax framework to ensure transparency, compliance, and alignment with international best practices. Since the introduction of Value Added Tax (VAT) in 2018, the country’s Federal Tax Authority (FTA) has consistently refined its rules to address evolving business environments and compliance gaps.
The most recent update — Cabinet Decision No. 100 of 2025, effective from 29 September 2025 — introduces major amendments to VAT registration and deregistration procedures under Federal Decree-Law No. 8 of 2017.
These changes aim to streamline administrative efficiency, clarify compliance obligations, and maintain the integrity of the tax system. For businesses in the UAE, especially in Dubai, understanding how these VAT amendments impact registration and deregistration is essential to remain compliant and avoid costly penalties. In this detailed guide, we’ll explain what’s new in 2025, what it means for your business, and how professional VAT services in Dubai can help ensure smooth compliance with the updated VAT regulations.
Overview of the 2025 VAT Amendments
The Cabinet Decision No. 100 of 2025 amends key articles of the Executive Regulation, primarily focusing on Articles 59 and 60, which deal with tax registration and deregistration processes. The amendment also introduces a new clause — Article 14 (bis) — empowering the FTA to deregister certain businesses under specific conditions to protect the integrity of the VAT system. In essence, the UAE government has reinforced the importance of maintaining accurate, up-to-date VAT records and ensuring that only eligible entities remain registered in the system.
Understanding VAT Registration in the UAE
VAT registration is mandatory for any business whose taxable supplies and imports exceed the mandatory registration threshold of AED 375,000 over the past 12 months or are expected to exceed it in the next 30 days.
Businesses may also voluntarily register if their taxable supplies or expenses exceed AED 187,500. This allows startups and smaller entities to recover input VAT on purchases and appear more credible to customers and suppliers. Proper registration ensures your business is recognized as a compliant taxpayer, enabling you to charge VAT, claim input tax credits, and maintain accurate financial documentation.
What’s New in VAT Registration Rules for 2025
The 2025 amendments bring greater clarity and control over VAT registration procedures. Here are the key updates:
Enhanced Authority for the FTA
The Federal Tax Authority now has the authority to automatically register businesses that meet the mandatory threshold but fail to submit an application within the required timeframe. This helps prevent tax evasion and ensures that all eligible entities are captured within the tax net.
Strict Timelines for Registration
Businesses that cross the AED 375,000 mandatory threshold must apply for registration within 30 days. Failure to register on time may result in penalties and backdated VAT obligations. The FTA may also impose retroactive registration, meaning that VAT must be accounted for from the date the threshold was first exceeded.
Simplified Voluntary Registration
The voluntary registration process has been simplified, particularly for startups and new entities that anticipate crossing the voluntary threshold soon. This encourages compliance from the earliest stages of business activity.
VAT Group Registration Rules
The amendments clarify that multiple entities under common control can apply for VAT Group registration, provided they meet the “related party” conditions. Under the 2025 rules, the FTA can reject applications if it determines that the group structure could lead to tax evasion or reduced tax transparency. All members of a tax group are jointly and severally liable for VAT dues, while the representative member handles the administrative filings.
Key Changes in VAT Deregistration for 2025
One of the most significant updates in Cabinet Decision No. 100 of 2025 is related to VAT deregistration. Previously, deregistration was largely business-initiated. The new provisions grant the FTA expanded powers to initiate deregistration when it deems necessary.
Here’s a breakdown of what has changed:
Introduction of Article 14 (bis): FTA-Initiated Deregistration
This new clause allows the Federal Tax Authority to deregister a taxpayer if the entity no longer meets registration criteria or if it believes deregistration is necessary to protect the integrity of the tax system. For instance, if a company ceases operations but fails to apply for deregistration, the FTA can now deregister it directly. This measure aims to prevent inactive or non-compliant businesses from remaining in the VAT registry, which could otherwise distort the reporting system.
Conditions for Business-Initiated Deregistration
A business can apply for VAT deregistration if it:
- Ceases to make taxable supplies, or
- Has taxable supplies and expenses below the voluntary threshold (AED 187,500) over the last 12 months.
Businesses must submit their deregistration request through the FTA e-Services portal within 20 business days of becoming eligible.
Final VAT Return and Outstanding Liabilities
Before deregistration is approved, the FTA requires the business to:
- File its final VAT return,
- Settle any outstanding tax liabilities, and
- Account for deemed supplies (e.g., remaining stock or assets used for non-business purposes).
Failure to complete these steps could delay or invalidate the deregistration process.
Deregistration for Tax Groups
Under the new rules, if one member of a Tax Group becomes ineligible or ceases to meet the related party criteria, the FTA may:
- Deregister that member individually, or
- Deregister the entire tax group if the group structure no longer meets the required conditions.
This ensures that only active and compliant business entities remain registered under group taxation.
How the 2025 Changes Affect UAE Businesses
The new VAT registration and deregistration framework significantly impacts how businesses manage compliance in the UAE. Below are the key takeaways for companies across sectors:
1. Greater Compliance Responsibility
Businesses now face stricter oversight regarding VAT eligibility, filings, and ongoing compliance. Failing to maintain up-to-date tax records could result in automatic deregistration or financial penalties.
2. Increased Administrative Efficiency
The new rules streamline administrative processes for both the FTA and businesses, making registration and deregistration faster and more transparent through online systems.
3. Stronger Monitoring of Tax Groups
Multinational corporations and large corporate groups will need to ensure their group registration structures comply with the new related party definitions and maintain transparency to avoid rejection or deregistration.
4. Impact on Startups and SMEs
Startups can now benefit from simplified voluntary registration, allowing them to register early and claim input tax credits. However, they must also maintain accurate accounting to meet ongoing compliance obligations.
5. Virtual Assets and Digital Businesses
The inclusion of virtual assets under the VAT regime means digital and crypto-based businesses must review their tax obligations and registration eligibility carefully. Professional VAT consultants can help such firms ensure compliance under the updated framework.
6. Common Challenges Businesses May Face
Adapting to new VAT regulations can pose challenges, particularly for small and medium enterprises that lack in-house tax expertise. Some of the common issues include:
- Missing registration deadlines and incurring penalties
- Incorrectly calculating taxable supplies for threshold determination
- Delays in deregistration after ceasing operations
- Incomplete record-keeping and invoice documentation
- Misinterpretation of FTA notices or requirements
Businesses can mitigate these risks by engaging trusted VAT services in Dubai to handle registration, filing, and compliance professionally.
Why VAT Registration and Deregistration Compliance Matters
Non-compliance with VAT obligations can lead to significant financial and legal consequences. These may include:
- Penalties for late registration or deregistration
- Backdated tax liabilities (the FTA can retroactively apply VAT obligations)
- Suspension of tax group status
- Difficulty obtaining clearance certificates for liquidation or restructuring
Maintaining proper VAT registration status demonstrates transparency, supports smoother audits, and enhances business credibility in the UAE’s regulated financial environment.
How TFAB Helps Businesses Navigate VAT Changes
At TFAB, we specialize in helping businesses navigate the complexities of UAE tax laws. Our experienced consultants provide end-to-end VAT services in Dubai, covering every aspect of registration, filing, compliance, and deregistration.
- VAT registration and voluntary registration assistance
- VAT deregistration and compliance clearance
- VAT return filing and audit representation
- VAT Group structuring and management
- Periodic compliance reviews and VAT health checks
- Virtual asset VAT advisory services
We tailor our approach to each client’s business structure, ensuring that you meet every compliance requirement while optimizing financial efficiency. Our proactive monitoring of FTA updates means your business always remains ahead of regulatory changes.
Preparing Your Business for the 2025 VAT Amendments
To stay compliant under the updated 2025 VAT rules, businesses should take the following steps:
- Review registration status: Check if your taxable supplies exceed mandatory or voluntary thresholds.
- Update internal records: Ensure all invoices, ledgers, and filings are up to date.
- Reassess VAT Group eligibility: Verify that your related entities meet the revised conditions.
- Plan for deregistration (if applicable): File requests promptly if your business ceases taxable activities.
- Seek expert support: Engage professionals for accurate, penalty-free compliance.
By staying proactive, businesses can avoid unnecessary penalties, streamline reporting, and maintain good standing with the FTA.
Conclusion: Stay Compliant, Stay Confident
The Cabinet Decision No. 100 of 2025 marks a major milestone in the UAE’s VAT evolution. The updated registration and deregistration rules enhance compliance efficiency, strengthen tax integrity, and ensure that the VAT system remains transparent and future-ready. For UAE businesses, these amendments are more than procedural changes — they represent a call to strengthen internal compliance and adopt a more strategic approach to tax management. At TFAB, our mission is to help businesses like yours remain compliant, confident, and competitive in this dynamic regulatory environment.
Need expert guidance on VAT registration or deregistration? Let TFAB’s specialists simplify your compliance journey. Contact us today for personalized VAT consultation and professional VAT services in Dubai tailored to your business needs.