Update: Economic Substance Regulations in the UAE - Part 3
November 12, 2020
In order to ensure that you do not incur any penalties, contact us today for assistance with filing the notification and the Economic Substance Report.
The UAE Cabinet Resolution No. 57 of 2020 Concerning Economic Substance Requirements (the “Decision 57”), Ministerial Decision No. 100 of 2020 (“Ministerial Decision 100”) urges license holders to resubmit their Notifications through the Ministry of Finance Portal, which will go live in the first week of December 2020.
All licensees that undertake a relevant activity must file their notifications within six months from the end of their financial year. All ESR Reports must be submitted within 12 months from the end of their financial year (i.e. Licensees that have their financial year ending on the 31st of December 2020, must submit their ESR Reports by December 2020, through the Ministry of Finance Portal).
Licensees and/or Exempted Licensees that fail to submit their Notification along with the required supporting documents by 31 December 2020 will be issued a penalty of AED 20,000 under Article 13 of Decision 57 for failure to provide a Notification. Licensees and/or Exempted Licensees (where applicable) that fail to submit their Economic Substance Report within the aforementioned period shall be subject to a penalty of AED 50,000 under Article 14 of Decision 57 for failure to provide an Economic Substance Report.
The Economic Substance Report will include Financials Statements, amount of income, expense and assets held, number of employees, location etc. in relation to the relevant activity, declaration of meeting the ES Test among others.