Kediataxconsultants

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SERVICES

ESR:

As part of the UAE’s 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, the UAE issued Economic Substance Regulations (Cabinet of Ministers Resolution No. 31 of 2019), (the “Regulations”) on 30 April 2019. The Regulations require UAE onshore and free zone companies and certain other business forms that carry out any of the defined “Relevant Activities” listed below to maintain and demonstrate an adequate “economic presence” in the UAE relative to the activities they undertake. The Regulations apply to Licensees that carry out any of the following Relevant Activities.

●        Banking Businesses
●        Insurance Businesses
●        Investment Fund Management Businesses
●        Lease-Finance Businesses
●        Headquarter Businesses

●        Shipping Businesses
●        Holding Company Businesses
●        Intellectual Property Businesses
●        Distribution and Service center Businesses

Noncompliance with ESR within due time can attract penalty of AED 20,000 in case of non-submission of ESR notification and AED 50,000 in case on non-submission of ESR Report

Kedia tax consultants can assist you in following ways-

  • Review business group structure to ascertain applicability of economic substance regulations.
  • Perform a gap assessment to determine the current level of compliance with the requirements which could include review of – contracts, details of assets, expenditure, and employees deployed in UAE, evidence of direction and management in UAE.
  • Assist you about remedial options which could include – inject additional substance or restructure the entity’s’ business / operations / holdings.
  • Assistance in designing policies for entities to comply with the economic substance tests.
  • Preparation and submission of annual notification and reporting for the entities allowed to carry out a ‘Relevant
  • Activity’ in the UAE.
    To train the concerned person in the organization about ESR requirement & prepare compliance checklist.