Cancelled Your Trade License? Fines May Still Be Following You
Dubai Trade License Cancellation
Even after cancelling your UAE trade license, your responsibilities with the Federal Tax Authority (FTA) may not be over. Failure to take a few final tax compliance steps could leave you with accumulating penalties tied to your Emirates ID, impacting your future ventures and credit/legal standing.
Here’s what you must know before walking away from your business.
VAT Deregistration is Not Automatic
If your company was registered for Value Added Tax (VAT), you are legally required to deregister within 20 business days of becoming ineligible (i.e., stopping taxable activity).
- FTA Penalty: AED 1,000 for the first offense, AED 2,000 for subsequent delays.
- FTA Guidance: VAT Deregistration Requirements, even if your license is cancelled. Failing to submit a VAT deregistration request keeps you active in the FTA system, triggering automatic fines.
Corporate Tax Registration is Mandatory, Even for Dormant or Cancelled Entities
Under Federal Decree Law No. 47 of 2022, all taxable persons must register for UAE Corporate Tax, even if:
- They no longer conduct business
- The company is in the process of liquidation
- The business made no profit
- FTA Penalty: AED 10,000 for failing to register
- FTA Portal: Corporate Tax Registration. Closing your license does not exempt you from tax registration or compliance. You must either register or apply for exemption as part of your company’s cancellation.
Fines Are Tied to Your Emirates ID, Not Just the License
FTA records associate tax obligations with your Emirates ID or passport as the Authorized Signatory. That means:
- Unpaid penalties may follow you into future business setups
- You may face delays or issues when applying for new licenses or visas
- Your name remains linked to outstanding compliance records
Why We Go the Extra Mile at EZONE
Although VAT deregistration and Corporate Tax registration are not required by DET Dubai for license cancellation, we include them in our process to ensure your full tax exit compliance.
| Compliance Step | Required by FTA | Penalty |
|---|---|---|
| VAT Deregistration | Yes | AED 1,000–2,000 |
| Corporate Tax Registration | Yes | AED 10,000 |
To fully exit your business legally and financially, ensure you’re also removed from the FTA system.
Questions or Ready to Close the Trade License Loop Properly?
Contact us; we are here to ensure your business closure doesn’t leave you with open-ended risks.
