ESR Notification Filing Services in UAE

The Economic Substance Regulations (ESR) are another key regulatory requirement for companies registered in the UAE. Entities are required to comply with ESR requirements outlined in the Cabinet Resolution 57/2020, which repealed the previous Cabinet decision 31/2019.

ESR regulations require the UAE mainland, offshore and free zone companies that carry out relevant activities to maintain and demonstrate adequate economic presence in the UAE. Filing the Economic Substance Notification annually to the authority is one of the key requirements as per the ESR regulations (submitting the ESR Report and meeting the ES test are the other two).

Jitendra Chartered Accountants (JCA), one of the best ESR consultants in Dubai, can help you navigate the complexities of ESR compliance with confidence. We provide top-notch ESR notification filing services in Dubai so that you can ensure compliance and avoid hefty penalties.

Understanding UAE’s ESR Regulations

The ESR is aligned with the Organisation for Economic Co-operation and Development’s (OECD) global standard to prevent and control harmful tax practices. The UAE introduced the ESR to honor its commitment as a member of the OECD Inclusive Framework and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation.

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    Relevant Activities Subject to ESR in the UAE

    Companies carrying out the following nine relevant activities are required to comply with ESR requirements in the UAE:

    1. Banking Businesses
    2. Insurance Businesses
    3. Investment Fund Management Businesses
    4. Lease-Finance Businesses
    5. Headquarter Businesses
    6. Shipping Businesses
    7. Holding Company Businesses
    8. Intellectual Property Businesses
    9. Distribution and Service Center Businesses

    Applicability of ESR Notification Filing in the UAE

    Every Licensee (Companies who carry out any relevant activity/activities under ESR) and the exempted licensee is required to submit the ESR notification to the Regulatory authority annually. Hire JCA’s ESR notification filing services in Dubai to notify the regulatory authority in line with the regulations.

    A licensee can be either a juridical person (incorporated inside or outside the UAE); or an Unincorporated Partnership registered in the UAE (including a Free Zone and a Financial Free Zone and carries on a Relevant Activity) but who carries out the relevant activity/activities under ESR

    An exempted licensee under ESR in the UAE can be any of the following:

    • A Licensee that is an Investment Fund
    • A Licensee that is a tax resident in a jurisdiction other than the UAE
    • A Licensee that is wholly owned by one or more residents in the UAE, which is not part of an MNE Group; and only carries out business in the UAE
    • A Licensee that is a branch of a foreign entity the Relevant Income of which is subject to tax in a jurisdiction other than the UAE
    • Any other Licensee as determined under a decision of the Minister of Finance

    ESR Notification Requirement for UAE Companies

    Both the Licensee and Exempted Licensee are required to notify the following information to the Regulatory Authority:

    • The specific Relevant Activity performed by the entity during the Relevant Financial Year
    • Inform whether the company has generated Relevant Income during the Relevant Financial Year
    • Date of commencement and end of its Financial Year
    • Any other information or documents requested by the Regulatory Authority

    ESR Notification Requirements for Exempted Licensees

    Apart from the mandatory information, an Exempted Licensee must submit all information and documentation evidencing its status as an Exempted Licensee, and any further information as may be requested by the Regulatory Authority. JCA’s ESR notification filing services in Dubai can ease the complexities of the process.

    Deadline for filing the ESR Notification

    The ESR Notification needs to be filled within six months from the entity’s financial year-end.

    JCA’s ESR consultants in Dubai can help you with the deadlines. The following table will give you more clarity on determining the ESR notification filing deadlines in the UAE:

    Financial Year EndDeadline
    31 March30 September
    30 June31 December
    30 September31 March
    31 December30 June

    Penalty for Not Submitting ESR Notification

    Entities that fail to file the ESR Notification before the deadline will incur a penalty of AED 20,000. JCA’s ESR consultants can help you submit the ESR Notification within the deadline.

    Penalty for Providing Incorrect Information in ESR Notification

    Providing incorrect or false information in the Notification will lead to a hefty penalty of AED 50,000. Moreover, intentionally providing incorrect or false information or incorrectly claiming an exemption from the Economic Substance Regulations can result in the Licensee being deemed to have failed the Economic Substance Test for the relevant Reportable Period.

    JCA’s ESR Notification Filing Services in Dubai, UAE

    JCA offers comprehensive services for both ESR assessment and notification filing. Our ESR Services in the UAE include:

    Assessing the ESR Applicability

    We can help you assess whether the company comes under the scope of ESR.

    Economic Presence Evaluation

    JCA’s highly qualified ESR consultants in Dubai can evaluate the adequacy of your entity’s economic presence in the UAE

    Compliance Advisory

    JCA can provide you with insights on aligning your entity’s economic substance with ESR requirements.

    Notification Preparation

    We can assist you in preparing and submitting the ESR notification document on time

    Regulatory Compliance

    We can assist you in ensuring compliance with the ESR requirement to file the notification within 6 months of the end of the relevant financial year.

    Strategic Advisory

    JCA can enhance your compliance game by providing you with strategic ESR advisory services in the UAE.

    Jitendra Chartered Accountants: The Best ESR Advisers in Dubai, UAE

    Jitendra Chartered Accountants (JCA) is one of the leading auditors offering bespoke ESR notification filing services in Dubai, UAE. We can help the companies in assessing whether your company is subject to ESR in the UAE. If the companies are subject to the regulations, then the JCA can assess the operation of the companies across all the emirates (onshore/free zones) to see if the current activities are expected to fulfil the requirements of UAE Economic Substance Reporting.

    Our ESR experts in the UAE can advise companies with effective solutions to comply with the regulations. JCA also assists the business in preparing the notification and the report to be submitted to the concerned Regulatory Authority.