ESR Notification

UAE has passed the following F ederal Legislation to implement the convention which applies across the UAE, including all Free Zones and Financial Free Zone:

• UAE Cabinet of Ministers Resolution No. 31 Of 2019 Concerning Economic Substance Regulations, issued on 30 April 2019.
• Ministerial Decision No. 215 for the year 2019 providing guidance on Cabinet Decision No.31 of 2019, issued on 11 September 2019;
• UAE Cabinet of Ministers Resolution No. 58 of 2019
identifying the relevant Regulatory Authorities responsible for supervision and enforcement of the
Regulations, issued on 4 September 2019.

 

As per the Economic Substance Regulations (ESR), all Licensees are required to notify the Regulatory Authority (typically the license issuing authority) annually on the following aspects :

• Whether or not the Licensee is carrying on a Relevant Activity

• If the Licensee is carrying on a Relevant Activity, whether or not all or any part of the Licensee’s gross income in relation to the Relevant Activity is subject to tax in a jurisdiction outside the United Arab Emirates (UAE)

• The date of the end of the Licensee’s Financial Year (Accounting Reference Period).

 

 

REQUIREMENT UNDER THE REGULATION 

 Meet Economic Substance Requirements and

 File Economic Substance return with the ROC on an annual basis. Return is due within 12 months after the relevant financial year end.

DEADLINE : 

 

 

NAME of AUTHORITY

NOTIFICATION TIMELINEREVISED DUE DATE

– ESR FILING

Dubai World Trade Centre30-Jun-2031-Dec-2020
Dubai International Financial Centre (DIFC)12-Jun-2031-Dec-2020
Dubai Airport Free Zone03-Jun-2031-Dec-2020
Dubai Multi Commodity Centre (DMCC)30-Jun-2031-Dec-2020
Dubai Aviation Corporation07-Jun-2031-Dec-2020
Abu Dhabi Global Market (ADGM)30-Jun-2031-Dec-2020
RAKICC30-Jun-2031-Dec-2020
RAKEZ30-Jun-2031-Dec-2020
Ajman Free Zone30-Jun-2031-Dec-2020
Dubai Silicon Oasis31-May-2031-Dec-2020

 

PENALTIES FOR NON – COMPLIANCE : 

 

Failure to Notify: AED 10,000/- to 50,000/-

Failure to provide accurate or complete information:

Penalty of AED 10,000/- to 50,000/-; and

Deemed failure to demonstrate economic substance in the UAE Failure to

demonstrate sufficient economic substance in the UAE for the relevant Financial Year Financial Year:

 

First failure Penalty of AED 10,000/- to 50,000/-; and

 

Information exchange with foreign competent authority of:

  • Parent company,
  • Ultimate parent company, and
  • Ultimate beneficial

 

Second consecutive instance of failure Penalty of AED 100, 000/- to 300,000/-;

 

Trade / commercial license could be: suspended, withdrawn or not renewed.

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