28 July 2026 · How To
Deregistering If Directorship Was Your Only Supply
If board fees were your only taxable supply and they moved out of scope from 1 January 2023, you may no longer meet the conditions to remain VAT-registered, and you should assess your position rather than assume registration can simply be left dormant. Deregistration is applied for through EmaraTax once you can confirm you no longer make taxable supplies above the mandatory or voluntary threshold, and it follows a final VAT return together with any input-tax or asset adjustments the FTA requires. If you still make other taxable supplies — consultancy, management fees, or a delegated directorship invoiced through a company — you remain registered for those, and only the directorship-related change is assessed.
Exiloz Management & Tax Consultant · Dubai-based FTA-focused advisory · VAT, corporate tax & accounting
Only directorship income
The 2023 change did not automatically deregister anyone — it simply removed director fees from the definition of a taxable supply, which means a person whose only registered activity was board work may now be under the threshold without having done anything else. This matters because staying registered when you no longer make taxable supplies is not a neutral, harmless choice: it means continuing to file nil or near-nil VAT returns, and the FTA can treat a long-standing failure to deregister once conditions are met as a compliance failure attracting a penalty. The right first step is a straightforward check of what income remains taxable now that director fees have dropped out.
- Board fees now out of scope of VAT from 1 January 2023.
- If they were your only taxable supply, turnover may now sit under the threshold.
- Continuing to register is not a neutral, risk-free choice.
- Filing nil returns indefinitely can itself draw FTA attention.
- Assess income against both the mandatory and voluntary thresholds.
- Other taxable income keeps the registration open regardless of director fees.
The deregistration process
Deregistration is not a single click — it is a short but structured process on EmaraTax. The application asks for the reason for deregistering, the date taxable supplies stopped or fell below the threshold, and triggers a final VAT return covering the period up to the effective deregistration date. Any VAT previously recovered on assets still held, or adjustments required under the capital assets scheme, must be settled in that final return before the FTA will approve the application, and records must still be retained for the standard five-year period afterward even though the registration itself has closed.
- Apply for deregistration through the EmaraTax portal.
- State the reason and the date taxable supplies fell below the threshold.
- File the final VAT return covering the period to deregistration.
- Settle any input-tax or capital-asset adjustments in that return.
- Await FTA approval before treating the registration as closed.
- Keep records for five years after deregistration, as normal.
How quickly you should act
Deregistration is not optional once the legal conditions are met — the VAT law requires a taxable person to apply within 20 business days of no longer meeting the registration conditions, and missing that window exposes the director to an administrative penalty for late deregistration, separate from any tax itself owed. Many independent directors did not deregister when the 2023 change first took effect, either because they were unaware director fees had moved out of scope or because they assumed the change did not affect their registration status. If that describes your situation, the penalty exposure is generally best addressed by deregistering now and, where appropriate, explaining the delay, rather than continuing to leave the registration open.
- Deregistration must generally be applied for within 20 business days of no longer qualifying.
- Missing the window can trigger an administrative penalty for late deregistration.
- Many directors missed the 2023 trigger without realising it.
- Acting now limits further exposure even if the original deadline has passed.
When you should not deregister
Deregistration is only correct where director fees really were the sole taxable activity. A person who also runs a consultancy, is delegated to a second board through a company, or otherwise makes taxable supplies above the threshold should remain registered and simply exclude the out-of-scope director income from future returns — deregistering in that situation would be incorrect and would itself need to be reversed later. The safest approach is to total up everything that is still taxable once director fees are stripped out, and only apply to deregister if that remaining figure sits below the relevant threshold.
- Other taxable supplies above the threshold mean registration should continue.
- Simply exclude out-of-scope director fees from future returns instead.
- Wrongly deregistering creates its own correction and re-registration problem.
- Total remaining taxable income first, then decide.
Related guides
Frequently Asked Questions
For directors reconsidering whether their VAT registration is still needed.
Should I deregister for VAT?
If board fees were your only taxable supply and they are now out of scope, you likely no longer meet the registration conditions and should apply to deregister — but confirm first that you have no other taxable income before doing so.
What if I still have other taxable supplies?
You remain registered for those. Only deregister once your total remaining taxable supplies, excluding out-of-scope director fees, sit below the relevant threshold — otherwise simply stop charging VAT on the director fees and keep filing as normal for everything else.
Where do I deregister?
On EmaraTax. You submit the deregistration application stating the reason and effective date, then file a final VAT return covering the period up to that date, including any input-tax or asset adjustments.
Is there a deadline to deregister?
Yes. You generally must apply within 20 business days of no longer meeting the registration conditions; missing that window can attract an administrative penalty for late deregistration on top of any correction needed.
I never deregistered after the 2023 change — what should I do now?
Deregister now rather than leaving the registration open indefinitely. The delay itself may carry a penalty risk, but that exposure only grows the longer the registration stays open with no genuine taxable activity behind it.
Do I need to keep records after deregistering?
Yes. UAE VAT record-keeping obligations continue for the standard five-year period after deregistration, covering invoices, fee notes and the final return, even though you are no longer filing.
Will deregistering affect my other business activities?
No, provided those activities are unrelated and below the threshold themselves. Deregistration only closes the VAT registration tied to the taxable supplies you no longer make; it does not affect your ability to trade or hold other licences.
Can Exiloz handle deregistration?
Yes. We confirm whether you meet the conditions, prepare the EmaraTax application and final return, settle any adjustments, and make sure the five-year record-keeping obligation is covered.
Do you still need to be VAT-registered?
Exiloz checks your remaining taxable income and handles the EmaraTax deregistration if you qualify.