In adherence to its membership in the Organization for Economic Co-operation and Development (OECD) Inclusive Framework and following an evaluation of its tax framework by the European Union Code of Conduct Group on Business Taxation, the UAE has issued the Economic Substance Regulations. The goal is to prevent the attraction of profits from specific mobile activities without any corresponding economic activity, thereby avoiding harmful tax practices.

The Economic Substance Regulations mandate that companies and other registered businesses in the UAE, engaged in one or more “relevant activities” maintain and exhibit an adequate “economic presence” in the UAE relative to their activities. The regulations aim to guarantee that UAE entities report actual profits that align with the economic activity carried out within the UAE.

Under the UAE’s Ministry of Finance guidelines on ESR, businesses must submit a notification within 6 months and an ESR report within 12 months from the financial year’s end. Penalties could be assessed if a submission is missed.

Our team of professionals specializes in navigating the complexities of ESR regulations, ensuring that your organization meets all the necessary criteria. We offer comprehensive services, including ESR compliance assessment, preparation of the Economic Substance Regulations report, and ongoing support to help you maintain compliance. With a deep understanding of the evolving ESR landscape, we stay up to date with the latest regulations and provide proactive solutions tailored to your specific industry and jurisdiction.