Tax, VAT

UAE Economic Substance Regulations: Updated notification filing requirements

 alnuaimi  June 12, 2020

 3,799  Closed

UAE Economic Substance Regulations(ESR) Updated notification :

The UAE Economic Substance Regulations(ESR) Test requires a Licensee to demonstrate that: the Licensee and Relevant Activity are being directed and managed in the UAE; the relevant Core Income Generating Activities (“CIGAs”) are being conducted in the UAE; and. the Licensee has adequate employees, premises and expenditure in the UAE

In UAE Economic Substance Regulations(ESR) Updated notification filing requirements,the approach of the different authorities in relation to which entities should be filing the initial notification is currently inconsistent, and therefore it is important to monitor announcements/ clarifications that are made by the relevant Regulatory Authorities.

Immediate actions

To avoid non-compliance with these rules and potential penalties, as a first and immediate step all UAE entities (both companies and branches) should assess whether they fall under the UAE Economic Substance rules (in 2019) and which of the below compliance obligations they may have (if any):

• Notification filing
• Having sufficient substance in the UAE and how to demonstrate this
• Filing of an annual substance return

If the entity does fall under these rules and has to demonstrate sufficient substance in the UAE, it should also make an assessment as to whether it can satisfy the economic substance tests prescribed by the regulations.

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