ESR Notifications & Filing Services
Another compliance requirement for organisations registered in the UAE is the Economic Substance Regulations. The Cabinet Resolution No. 31/2019 on Economic Substance Regulations in the UAE was issued by the United Arab Emirates (UAE) Ministry and took effect on April 30, 2019. The Ministerial Decision 215 for the year 2019 that provided instructions for putting the terms of Cabinet Decision No. 31/2019 into effect came after that. The rule went into effect on April 30, 2019, and it is applicable to all Licensees doing the following Relevant Activities in the United Arab Emirates, including in the Free Zone or Financial Free Zone.
Absence of the need that the activity be substantial is one of the four requirements in the OECD framework. In order to stop tax evasion and avoidance, the European Union is also attempting to establish global tax governance. The Economic Substance Regulations adhere to the international norm on harmful tax practises established by the Organization for Economic Co-operation and Development (OECD). UAE also committed to have the minimal requirements in the State and joined the comprehensive OECD Base Erosion and Profit Shifting (BEPS) framework. The UAE has a “No or Only Nominal Tax Jurisdiction” (NOON) environment, which is consistent with other jurisdictions that are parties to this framework and have a similar environment.
Relevant Activities under UAE Economic Substance Regulations
- Banking Business
- Insurance Business
- Investment Fund Management Business
- Lease-Finance Business
- Shipping Business
- Headquarters Business
- Intellectual Property Business
- Holding Company Business