Earlier in April 2019, the Cabinet of Ministers in the United
Arab Emirates (UAE) released Resolution No 31 of 2019 (Resolution)
concerning Economic Substance Regulations (ESR or the Regulation).
You may also refer our past alerts on ESR as under:
Click Here Key highlights of FAQs on Economic Substance Regulations in UAE
Click Here Introduction of Economic Substance Regulations in UAE< /p>
Compliance requirement as per the regulation
As you are aware, the regulation requires licensees to undertake mandatory compliance as under, failing which the licensee might have to pay the penalty
|Compliance to be undertaken||Due date|
|Notification to be filed||To be notified by respective regulatory authorities|
|Report to be filed||Within 12 months from the end of Financial Year|
Earlier, Dubai International Financial Centre (DIFC) had informed that licensees registered/situated in DIFC need to submit a notification on or before 31 March 2020 for the year 2019. However, on 15 March 2020, DIFC has announced that the said deadline to submit notification is no longer applicable. There is no announcement about the new deadline for notification at this stage.
This is a welcome move considering that businesses in UAE are yet evaluating the applicability of Regulation. We also learned that the relevant Ministry may come out with more guidance on the subject, considering practical challenges faced by the businesses. This being the first year of applicability, the businesses in UAE must take an informed decision on the compliances mandated under the regulation to avoid any wrong precedence and also penal consequences. It is also anticipated that the Ministry will soon notify the form and manner for filing the notification.
Originally published SKP, May 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.