Jun 29, 2020 
ESR and CbCR
ESR Notification Filling guidance issued by Ministry of Economy
The following is an extract of the guidance issued by Ministry of Economy to fill the ESR Notification Form for all the mainland companies in UAE.
Instructions
A. Licensee details
- 1. This is the name mentioned on the commercial licence, trade licence or permit of the Licensee.
- 2. This is the address stated on the commercial licence, trade licence or permit of the Licensee.
- 3. This is the registration number stated on the commercial licence, trade licence or permit of the Licensee.
- 4. This is the legal form of the Licensee as stated on the commercial licence, trade licence or permit.
- 5. The financial year end or accounting reference period is the date on which the Licensee’s financial year ends (and to which the Licensee’s financial accounts are prepared). In the absence of a financial year end / accounting reference period (e.g. where the Licensee is not required to have a financial year end / accounting reference period), the anniversary of the Licensee’s incorporation date should be used.
- The Reportable Period is the financial period to which the Economic Substance Notification relates. Licensees are required to include the “start” and “end” date of the relevant financial period.
- A Licensee whose financial year corresponds to the calendar year would include the following: Start date: 1 January 2019 End date: 31 December 2019
- A Licensee incorporated on 1 July 2019 with a 31 March 2020 financial year end, would include the following: Start date: 1 July 2019 End date: 31 March 2020
- The Reportable Period is always the financial period preceding the financial period in which the Economic Substance Notification is due.
- Licensees that are in the process of liquidation are required to comply with the Economic Substance Notification requirement in respect of Reportable Periods ending on or before the completion of the liquidation process.
- Licensees that no longer have a commercial licence, trade licence or permit before the Economic Substance Notification filing deadline for a relevant Reportable Period are not required to file a Notification for the Reporting Period ending on the date of liquidation.
- 1. A ‘substance over form’ approach must be used to determine whether the Licensee carried on a Relevant Activity. This means looking beyond what is stated on the commercial licence, trade licence or permit to the activities actually undertaken during the Reportable Period.
- 2. Please refer to [Relevant Activities Guide] for further information in respect of each Relevant Activity.
- Income from a Relevant Activity means all gross income earned from that activity as recorded in the books and records of the Licensee for the Reportable Period prepared under applicable accounting standards, including income that is generated outside of the UAE.Please indicate whether the gross income from the Relevant Activity(ies) was fully or partially subject to tax in a jurisdiction other than the UAE. For example, income from a Relevant Activity could be subject to tax outside the UAE if the Licensee has a taxable presence / permanent establishment in a foreign country that reports all or part of the income from the Relevant Activity in its tax return.
- 3. Where a Licensee receives income from an Intellectual Property (“IP”) Asset, it will also have to consider if it is a High Risk IP Licensee. A High Risk IP Licensee is a Licensee that carries on an IP Business, and meets all of the following three requirements:
- 1. The Licensee did not create the IP Asset which it holds for the purpose of its business, and
- 2. The Licensee acquired the IP Asset from either –
- a. A group company, or
- b. In consideration for funding research and development by another person situated in foreign jurisdiction, and
- Please refer to [Relevant Activities Guide] for further information in respect of High Risk IP Licensees.The Parent Company of the Licensee is the entity that directly:
- (a) holds a majority of voting rights in the Licensee; or
- (b) has the right to appoint or remove a majority of the boards of directors of the Licensee; or
- (c) controls alone, pursuant to a joint arrangement with other shareholders or members, a majority of the voting rights in the Licensee; or
- (d) has the right to exercise, or actually exercises, dominant direct influence or control over the Licensee.
- The Ultimate Parent Company of the Licensee is an entity of a group that:(a) owns directly or indirectly a sufficient interest in the Licensee, such that it is required to prepare consolidated financial statements under accounting principles generally applied in its jurisdiction of tax residence, or would be so required if its equity interests were traded on a public securities exchange in its jurisdiction of tax residence; and(b) there is no other entity of such group that owns directly or indirectly an interest described in subsection (a) above in the first mentioned entity.The
