ESR Notification Deadline Looms: A 2024 Guide for Businesses
The UAE implemented the Economic Substance Regulations (ESR) as a step towards preventing harmful tax practices and enhancing tax transparency. The implementation of ESR in the UAE is also seen as the country’s effort to honour its commitments as a member of the OECD Inclusive Framework on BEPS (base erosion and profit shifting).
As a result, the mainland, offshore and free zone companies registered in the UAE are required to demonstrate adequate economic presence in the country. In line with this, the businesses that conduct the relevant activities are required to annually submit the ESR notification and Report to the authority.
Failing to meet the ESR compliance requirements in the UAE will lead to hefty administrative penalties. Keeping track of the ESR deadlines in the UAE is the best way to avoid penalties and other consequences.
The best ESR consultants in Dubai can help you comply with the ESR notification and reporting deadlines. This blog is designed as a quick guide to help you comply with ESR deadlines in the UAE:
Understand the UAE ESR Compliance Requirements
Before diving into deadlines, it is critical to understand the mandatory obligations imposed by the UAE ESR Law. Since any compliance failure will be dealt with strictly, businesses are advised to seek help from the best ESR advisers in Dubai. Given below are the critical ESR obligations in the UAE:
ESR Notification
A notification needs to be submitted within six months from the financial year (FY) end declaring that the company carries out the Relevant Activity, irrespective of whether the licensee is exempt from the ESR or income was generated from the Relevant Activity
The nine relevant activities are Banking Business, Insurance Business, Investment Fund Management Business, Lease-Finance Business, Headquarters Business, Shipping Business, Holding Company Business, Intellectual Property Business and Distribution and Service Centre Business.
Economic Substance Test
Businesses are required to demonstrate that they have sufficient economic substance in the UAE.
Reporting
ES Reporting is an annual reporting of financial information and other relevant details. It must be submitted within 12 months from the end of the FY, but only if income was earned in the period from Relevant Activity and the licensee was not exempt from the ESR. ESR consultants in the UAE can help you submit the report.
ESR Notification and Reporting Deadlines 2024
The below table illustrates ESR notification and Report submission deadlines in the UAE:
| Financial Year End | Notification Filing Deadline | Report Filing Deadline |
| 31st December 2023 | 30th June 2024 | 31st December 2024 |
| 30th June 2023 | 31st December 2023 | 30th June 2024 |
Penalties for Not Meeting ESR Deadlines in the UAE
Entities that fail to submit an ESR notification will incur an administrative penalty of AED20,000 and AED 50,000 for failing to submit the ESR notification or report respectively. The top ESR advisers in the UAE can help you meet the obligations within the deadline.
Things you Must do to Meet the ESR Notification & Report Deadlines
Business owners need to do the following things to ensure they submit the ESR notification and reports within the deadline:
- Conduct a self-assessment to determine whether the ESR obligations apply to them
- Determine to which extent the ESR reporting obligations apply to them
- If any changes happened in the business since the last financial year
- In case of any change, ensure the timely completion and submission of relevant ESR documentation
Hire the Best ESR Advisers in Dubai, UAE
Considering the hefty penalties, it is advisable to hire the expertise of reputed ESR consultants in Dubai such as Jitendra Chartered Accountants (JCA) to ensure complete compliance. Our qualified ESR experts in the UAE can help the companies by assessing whether they can meet the UAE Economic Substance Test, providing recommendations if the companies fail to meet the ESR test and helping them file the annual ESR Notification and ESR Report without any error.
JCA can also help you with filing an appeal in case of penalties and carry out any necessary correspondence with the Federal Tax Authority (FTA). JCA is one of the leading providers of ESR compliance services in the UAE. JCA can help companies properly assess their applicability and file annual notifications and reports. JCA can also help the companies by providing ESR penalty appeal services in case any penalty is incurred. Call us today to ensure ESR compliance at affordable rates.