The Mistake That Costs AED 1,000+ Every Quarter
Here's the scenario we see regularly: a business owner decides to close their company or their revenue has dropped below the mandatory threshold. They log into EmaraTax, submit a VAT deregistration application, and assume they're done. No more VAT returns. No more quarterly filings. The application is in — they're deregistering.
Then, 3 months later, they check EmaraTax and find an AED 1,000 late filing penalty. The VAT return for the quarter that fell between their application and the FTA's approval was never filed. Because they thought submitting the deregistration meant they could stop.
It doesn't.
Submitting a deregistration application does not pause, suspend, or exempt you from VAT return filing. Your VAT registration remains fully active until the FTA formally pre-approves the deregistration. Every quarterly return that falls due during the review period must be filed on time. The penalty is AED 1,000 for the first missed filing and AED 2,000 for each subsequent miss within 24 months.
The Timeline: Application → Pre-Approval → Final Return
Here's how the deregistration process actually works from a filing perspective:
| Stage | Filing Obligation | What Happens |
|---|---|---|
| Application submitted | ✅ Must file regular returns | Application is under FTA review. Your VAT registration is still active. All quarterly returns must be filed on time. |
| FTA review period (20–40 days) | ✅ Must file regular returns | If a quarterly deadline falls during this period, you must file. No exceptions. |
| FTA pre-approval issued | ❌ Regular returns stop | Once pre-approved, you no longer file regular quarterly returns. But you must file one final return. |
| Final VAT return filed | Final return only | Covers the period from the start of the last quarter to the effective deregistration date. Must include deemed supply on assets if applicable. |
| Deregistration certificate issued | No more returns | You're done. No further VAT obligations (but keep records for 5–7 years). |
The critical point is between "application submitted" and "pre-approval" — that gap can be 20–40 business days or more. If a quarterly filing deadline falls in that window, you must file.
Real-World Example
A company submits a VAT deregistration application on 15 January 2026. Their next quarterly return (Oct–Dec 2025) is due on 28 January 2026.
The business owner assumes: "I applied for deregistration on the 15th, so I don't need to file the return due on the 28th."
Wrong. The FTA hasn't pre-approved anything yet. The return is still due on the 28th. If not filed, an AED 1,000 penalty is auto-applied on the 29th. The deregistration application has zero impact on the filing deadline.
The FTA might not even review the deregistration application until February or March. By then, the penalty is already on the account.
💡 Rule of thumb: If your EmaraTax dashboard shows an open VAT return with a deadline, file it — regardless of whether you've applied for deregistration, whether your business is dormant, or whether you expect to be deregistered soon. The only thing that stops the filing obligation is FTA pre-approval.
What About Nil Returns During Deregistration?
Even if your business has completely stopped operating — zero sales, zero purchases, zero VAT — you must still file a nil return for every period until pre-approval. The FTA doesn't distinguish between "active return with AED 50,000 output VAT" and "nil return with zeros across the board." Both are mandatory. Both trigger the same AED 1,000 penalty if late.
If you've been filing nil returns for multiple quarters while waiting for deregistration, read our guide: How long can you file nil VAT returns? →
What Happens After Pre-Approval?
Once the FTA pre-approves your deregistration, regular quarterly returns stop. But you still have one more filing: the final VAT return.
The final return covers the period from the start of the last tax quarter to the effective deregistration date. It must include any output VAT due on remaining stock or assets (deemed supply) if their value exceeds AED 500,000. Read our final VAT return guide →
The final return must be filed within 28 days of the pre-approval date. Late filing of the final return also triggers the AED 1,000 penalty.
Before You Deregister: Have You Applied for Your VAT Refund?
If your account shows an excess input VAT balance (i.e., you're owed money by the FTA), you must apply for a VAT refund before deregistration is finalised. The FTA will not approve deregistration while refundable amounts are outstanding. Read more: Why VAT refund is mandatory before deregistration →
Have Outstanding Penalties? Those Must Be Paid Too
The FTA will not issue a deregistration certificate if you have unpaid penalties on your account — whether for late filing, late payment, or late deregistration application. All penalties must be settled before the certificate is issued. Read more: Penalties must be paid before deregistration →
Need Help with VAT Filing or Deregistration?
VAT filing from AED 199/month. VAT deregistration handled end-to-end. We file all pending returns before submitting deregistration.
Written & Reviewed by Nithin — FTA-Registered Tax Agent (TRN: 104218042400003)
This guide reflects actual FTA penalty outcomes observed during VAT deregistration processes handled by Fastlane in 2025–2026.