Declaration Letter vs Financial Statements: What the FTA Actually Accepts for Corporate Tax Deregistration

The declaration letter versus financial statements question comes up on almost every corporate tax deregistration Fastlane files, because the FTA's follow-up email is easy to misread. Owners see “Full Financial Statements for all the tax periods” and start budgeting for an audit. They do not see the words “or a declaration letter” two lines later. This guide is built from the additional-information requests and outcomes on CT deregistration applications Fastlane processed in 2025 and 2026: what the FTA asks for, when each route works, exactly what the letter must say, and how the decision plays out in cost and time.

What does the FTA's additional-information email for CT deregistration actually say?

After a CT deregistration application is submitted on EmaraTax, the FTA commonly replies that it requires additional information and asks the applicant to attach full financial statements for all the tax periods — balance sheet, trial balance and profit and loss — or a declaration letter of the revenue and the assets, signed or stamped. The request is standard procedure, not a sign that something is wrong with the application.

The purpose of the request is verification. The FTA is checking that the returns already filed — including the final short-period return to the cessation date — were consistent with what the company actually did, and that no assets or income were left out before the company is released from corporate tax. A declaration letter that states the same revenue figures as the filed returns, with assets at nil or a small closing balance, answers that question for a small company as well as a set of statements would. Note that “full financial statements” here does not mean audited: the CT Law requires audited financial statements only for taxable persons with revenue above AED 50 million and for Qualifying Free Zone Persons (MD 84/2025).

When is a declaration letter enough for CT deregistration?

A declaration letter is normally enough when the company had no revenue or only modest, straightforward revenue, no employees, no fixed assets, inventory or receivables to value, no related-party or foreign-currency complexity, and no liabilities beyond a shareholder balance — or when a liquidation report already exists but its period does not match the CT tax periods and the letter bridges the dates.

Fastlane's practice is to try the letter first for every company that fits these profiles. Across the deregistrations processed in 2025–2026 the letter was accepted in the large majority of dormant and small-company cases; the saving is AED 499–999 in financial statement preparation and one to two weeks of turnaround. Where the FTA does come back, the financial statements are prepared at that point at the same cost as if they had been prepared first.

What must the declaration letter contain?

The declaration letter must be on company letterhead and state the legal name, tax registration number and EmaraTax application reference; declare total revenue for each tax period from the first period to the cessation date; declare total assets at the cessation date; state the date business ceased and that all liabilities are settled; and be signed by the authorised signatory registered with the licensing authority and stamped with the company stamp. One page is usually enough.

1. Heading and addressee — “Declaration of Revenue and Assets for Corporate Tax Deregistration”, addressed to the Federal Tax Authority, dated.
2. Identification — legal name exactly as on the CT registration certificate, the company's tax registration number, trade licence number and issuing authority, and the deregistration application reference from EmaraTax.
3. Revenue per tax period — one line per period: “Total revenue for the tax period 1 June 2023 to 31 December 2023 was AED 0”; “Total revenue for the tax period 1 January 2024 to 31 December 2024 was AED 17,000”; and so on to the final short period ending on the cessation date. The figures must equal those on the filed returns.
4. Assets at cessation — “Total assets as at [cessation date] were AED [amount]”, with a one-line breakdown if not nil (e.g. bank balance AED 1,200, no other assets).
5. Cessation and liabilities — the date the company ceased business, the reason (licence cancellation, liquidation, cessation of activity), and confirmation that all liabilities have been settled and no amounts are owed to creditors, employees or the FTA.
6. Supporting documents referenced — liquidation report (if any) with its period, bank closure letter, licence cancellation certificate; attach them to the EmaraTax response.
7. Declaration and signature — a sentence declaring the information true and complete, signed by the manager or authorised signatory, name and capacity printed, company stamp applied. Print, sign, stamp, scan to PDF.

When does the FTA need full financial statements instead?

Full financial statements are needed when revenue exceeded roughly AED 3 million in any period, when there were employees with end-of-service liabilities, fixed assets, inventory, investments or receivables to value, related-party or intercompany balances, foreign-currency dealings or multiple revenue streams, or when the FTA has already declined a declaration letter for the application.

The AED 3 million line is not an FTA rule; it is a practical marker. Above it the company was outside Small Business Relief, filed a full return with a taxable-income computation, and the FTA will want the statements behind that computation. Below it, with a simple profile, a declaration reconciled to the returns generally suffices.

What counts as full financial statements for CT deregistration?

For deregistration the FTA's minimum is a balance sheet, a trial balance and a profit and loss statement for each tax period from registration to cessation; a full IFRS set adds the statement of changes in equity, the cash-flow statement and notes, and is required where the company already had to prepare one — but an audit opinion is only required for revenue above AED 50 million or for QFZPs.

The accounting basis follows MD 114/2023: cash basis is permitted up to AED 3 million of revenue, IFRS for SMEs up to AED 50 million, full IFRS above. Fastlane prepares deregistration financial statements from AED 499 for a simple company and from AED 999 where there is trading activity and balances to reconcile, and the same statements serve the free zone if a liquidation audit report is still needed there.

Which route should you take? A decision framework

Start with the declaration letter for dormant and simple companies, attach an existing liquidation report where the dates do not match, try the letter first and escalate on request for mid-sized simple companies, and go straight to financial statements above AED 3 million or where staff, assets or complexity exist.

Worked example: a Sharjah free zone company with AED 17,000 revenue and a mismatched liquidation report

A Sharjah free zone consultancy with AED 17,000 of revenue over its life, no employees, minimal expenses and a liquidation report from another auditor whose period ended before the CT cessation date obtained its CT deregistration on a declaration letter alone, saving the AED 999 that new financial statements would have cost.

The point of the example is the date bridge. The liquidation report was real and adequate for the free zone, but it stopped three weeks before the CT cessation date, so on its own it did not cover the FTA's final period. A one-paragraph declaration that revenue in the gap was nil and assets at cessation were nil, with the report attached, closed the gap without new statements.

What happens if the FTA rejects the declaration letter?

The FTA issues a further additional-information request, usually specifying the statements it wants; you prepare the balance sheet, trial balance and profit and loss for each period and upload them before the stated deadline, and the application continues — nothing is lost except a few days, provided the deadline is met.

The one real risk is silence. FTA additional-information requests carry a response window, and an application left unanswered can be rejected outright, which means a fresh application, a fresh review period, and — if the cessation date is receding — exposure to the late-deregistration penalty of AED 1,000 per month up to AED 10,000 under Cabinet Decision No. 10 of 2024. Treat the request date as a deadline, respond through the application on EmaraTax rather than by email, and keep the acknowledgement.

Which returns and payments must be complete before either document helps?

Every CT return from the first tax period to the final short period ending on the cessation date must be filed, and every tax, administrative penalty and late-payment charge on the EmaraTax ledger must be paid or waived, before the FTA will act on either a declaration letter or financial statements; the documents support the returns, they do not replace them.

Fastlane files outstanding returns from AED 249 per period and reconciles the ledger before the deregistration goes in; the reasons a ledger balance stalls a certificate are covered in why penalties must be paid before deregistration.

What mistakes delay CT deregistration at the additional-information stage?

The delays Fastlane sees are: submitting a letter whose revenue differs from the filed returns, declaring assets at the liquidation date instead of the cessation date, an unsigned or unstamped letter, no application reference, sending statements for the financial year rather than the CT tax periods, responding by email instead of through EmaraTax, and missing the response deadline.

Companies that also hold a VAT registration should run the VAT deregistration in parallel; the FTA's VAT team has its own document requests, and the two certificates are issued independently.

Key terms used in this guide