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Economic Substance Regulations

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ESR in Dubai, Economic Substance Regulations (ESR), Economic Substance Regulations UAE

 

ECONOMIC SUBSTANCE REGULATIONUAE CABINET RESOLUTIONS NO 31 OF 2019 (ESR)

The United Arab Emirates has enacted the Economic Substance Regulations on 30th April 2019, which requires companies to have substantial activities in a jurisdiction, taking into account the global standards developed by the OECD and the EU for business taxation to curb harmful tax practices and be removed from the EU’s list of non-cooperative tax nations.

The purpose of the Regulations is to ensure -that UAE entities which undertake certain activities are not used to artificially attract or shift profits that are not proportionate to the economic activity undertaken in the UAE– by setting up the criteria that confirm that the Licensee is carrying out an activity in the UAE that achieves economic substance interest.

Economic substance regulations UAE will be applicable to onshore and free zone companies that engage in any of the below mentioned “Relevant Activities”;

Under the ESR, UAE licensees have two obligations:

  • To notify their Regulatory Authority confirming whether they are subject to the ESR or not.
  • If the licensee is doing any ‘relevant activity’, then it must also submit a report to the Regulatory Authority.

Please note that failure to file the said notification and Filing  Return may expose you to administrative penalties.

List of Regulatory authorities:

  • UAE Central Bank;
  • Insurance authority;
  • Securities and Commodities Authority
  • Ministry of Economy
  • Relevant Free zone authority
  • Relevant Financial Free Zone authority
 Relevant activities

  • Banking Business
  • Insurance business
  • Investment fund and management business
  • Lease finance business
  • Headquarters business
  • Shipping business
  • Holding company business
  • Intellectual property business
  • Distribution and service centers business

 

We can support and guide you on the compliance with ESR:

  • Assess the applicability of the ESR on your activities
  • Support, guidance, training on filing notification with the Relevant authority
  • Support for compliance with the provisions of the ESR
  • Assistance in reporting with Regulatory Authority on or before the due date

 

Essaar Associates, Chartered Accountants have specific expertise related to ESR in Dubai and UAE. We do all compliances related to Economic Substance Regulations in DUBAI and UAE. For ESR Assistance on ‘assessing your applicability to the law’, ‘Notifying the Authority’ and ‘Filing Return’, feel free to contact us.

04-3551826; 050-4577027 or 050-6748060.

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