Economic substance regulations UAE
About Us
Alliance CA is your premier partner for navigating the complexities of Economic Substance Regulations (ESR) in the UAE. As a leading firm in auditing, accounting, and tax advisory, we specialize in assisting businesses to understand and comply with ESR requirements effectively. Our team of experts is dedicated to evaluating your company's activities, advising on exemptions, and implementing strategies to address compliance gaps. We provide comprehensive support in documentation, preparation, and submission of annual ESR notifications and reports, ensuring your business meets all regulatory obligations. Choose Alliance CA for tailored, customer-centric solutions and a commitment to excellence in all aspects of economic substance compliance.
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Economic Substance Regulations UAE
The Economic Substance Regulations (ESR) were introduced in the UAE on 1st January 2020 to enhance tax transparency and compliance. Businesses engaged in specific activities like banking, insurance, finance, holding companies, IP business, fund management, service centers, distribution, and shipping must demonstrate substantial economic presence in the UAE. This involves passing the Economic Substance eligibility test, annually notifying and reporting to authorities on business activities, income sources, and financial details to prove compliance. Reports must be submitted within 12 months after the fiscal year ends, detailing activities, income, expenses, and assets to adhere to ESR requirements.
How to check your company’s requirement to submit economic substance regulations in UAE?
Under UAE's Economic Substance Regulations (ESR), registered businesses must assess their activities to ensure compliance with the substance over form method. This involves evaluating the economic substance of activities tied to their commercial license throughout the fiscal year. Companies must not merely carry out "relevant activities" in a passive manner; for instance, income from financial leasing must demonstrate substantial economic activity. Businesses can engage in multiple relevant activities within a single fiscal year, but must prove the economic substance for each, unless they are ancillary to a primary activity. Failure to comply with ESR, including inaccurate notifications or inability to demonstrate economic substance, could result in fines ranging from 10,000 to 50,000 AED, with the possibility of increased penalties or suspension of trade licenses for repeated non-compliance.
Why Choose
Alliance CA
Alliance Chartered Accountants specializes in auditing, accounting, and tax advisory, providing crucial support for navigating UAE's Economic Substance Regulations (ESR). Our services include assessing your business's activities for ESR applicability, identifying potential exemptions, advising on compliance strategies, and assisting with the preparation and submission of necessary documentation and reports. With a commitment to timely service and a client-centric approach, we aim to deliver tailored solutions that build value and foster strong client relationships.