For Financial Year ended 30 September 2023, ESR Notification deadline is 31 March 2024 and for the Financial Year ended 31 March 2023, ESR Report submission deadline is 31 March 2024.
Failure to comply will incur penalties between AED 20,000 to AED 50,000 and other issues. Read on to know more…
With reference to the guidelines, issued by MOF, the regulations are applicable to all the UAE entities carrying out relevant activities, please keep in view that there are some material changes in the revised
Economic Substance Regulations, under which any previous classification needs to be reconsidered.
Once a UAE company has been identified as undertaking relevant activities, the ESR requires the
company to satisfy the economic substance test which comprises three elements:
1). It is directed and managed in the UAE in relation to that activity
2). It conducts Core Income-Generating Activities (CIGA) in the UAE
3). It meets the adequate requirements with regard to the level of relevant activity carried on in the UAE.
If your financial year is ended on 30 September 2023, the deadline for submission of the ESR Notification and Report?
a) ESR Notification shall be submitted before 31 March 2024 (in 6 months) and
b) ESR Report should be submitted before 30 September 2024 (in 12 months) in the Ministry of Finance Portal.
Failure to comply with the Regulations can result in penalties ranging from AED 20,000 to AED 50,000 and other administrative sanctions such as the suspension, revocation, or non-renewal of the entity’s trade license or permit.
Failure to file ESR Notification or Report within March 31, 2024 – Minimum Penalty will be AED 20,000
Assess and file ESR Notification
Study your Business Activities in detail and assess the applicability of the Economic Substance Regulation for your business.
Changes in business to comply with ESR
To provide guidance and support for compliance with the provisions of the Economic Substance Regulation, if your activity is falling under the regulation and to conduct an “Impact Study and Gap analysis” in order to assess whether your business meets the compliance test and to provide the recommendations.
Submit ESR Report
Submit the ESR Report with Regulatory Authority before the Due Date.
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