As seen in GULF NEWS
Have you set up your company in line with the new UAE economic substance rules? If you have not yet, do it now – because if the looming deadline passes, be prepared to pay a hefty fine!
The deadline for the Economic Substance Regulation is fast approaching and business owners and managers must see to the submission of their ESR Notification with the utmost urgency.
Why the Economic Substance Regulations (ESR)
In simple terms, the Economic Substance Regulations (ESR) are aimed at companies based in low tax/no tax jurisdictions such as the UAE that report income without any real economic activity and substance in the UAE. These regulations apply to financial years commencing on or after January 1, 2019. The purpose of the Regulations is to ensure that UAE entities that undertake Relevant Activities demonstrate an adequate economic presence in the UAE relative to the relevant activities they undertake.
Please note that a first test (preliminary test) is compulsory for all entities resulting in a compulsory Notification to the competent authority. All mainland, free zone and UAE offshore companies including branches, subsidiaries and partnerships MUST FILE THE NOTIFICATION, whether or not they are carrying out any relevant activity.
Deadline for ESR Notification submission is the 30th of June, 2020!
Depending on the outcome of the preliminary testing & Notification, a second level testing (ESR Test) and report may be required for the company which conducts the Relevant Activities.
Finally, we provide clients, with the ESR Improvements report to assist them to pass this ESR test depending on their company profile, transactions and structuring.
Failure to provide Notification on time or willfully provide inaccurate information may lead to an administrative penalty of up to AED 50,000.
How can Wincore Advisory Group assist you for assessment on Economic Substance Regulations in the UAE?
- Preliminary Assessment: Identify whether your business is within the scope of the regulations and filing the Notification.
- Core Assessment: If within the scope of the Regulations, check whether your business pass the Economic Substance Test.
- Defaults Assessment: Identify the non-compliant elements if criteria of Regulations are not met.
- Rectification Procedure: Suggestions to correct the weaknesses in order to pass the Economic Substance Test.
- Submission of reports: Filing the returns and reports to the Relevant Regulatory Authority.
If you are worried about not fulfilling the ESR or incorrectly filing your Notification, then do not wait until it is too late and suffer the heavy penalties.
The experts at Wincore Advisory Group are here to assist you to prepare & submit the ESR notification, and also assist you in a potential ESR test & report.
Contact Us Today On +971 4221 2602.