Are you ready to report for Economic Substance Regulation (ESR) before the deadline?
November 28, 2023
This is to bring to your attention the upcoming Economic Substance Regulation (ESR) reporting deadline set for December 31, 2023, applicable to the Financial Year ending December 31, 2022.
Important points to consider:
• Relevant activities: According to the UAE Ministry of Finance's ESR Regulation, the obligation to file an ESR Notification and ESR Report rests with Licensees engaged in any of the relevant activities and earning relevant income specified in the regulation.
• Deadline reminder: The deadline for submitting the ESR Report is swiftly approaching. We urge you to take action promptly, considering the upcoming Public Holidays, to ensure compliance with the regulatory requirements.
• Penalty for non-compliance: Failure to file the ESR report within the stipulated deadline may result in an administrative penalty of AED 50,000. It is crucial to submit the report and any relevant information or documentation in accordance with the provisions of the resolution to avoid these penalties.
Recommended actions for your business:
• ESR assessment: We recommend that all Licensees conduct a comprehensive ESR assessment, regardless of engagement in relevant activities, and submit an ESR notification and report on the MoF portal, if applicable.
• Responsibility for relevant activities: Licensees engaged in relevant activities and earning relevant income must submit the ESR Notification and/or ESR Report. They will be held accountable to their respective regulatory authorities.
How MBG can assist you:
To mitigate potential issues with regulatory authorities such as the Federal Tax Authority (FTA) and the Ministry of Finance (MOF), we strongly advise all licensees to conduct an ESR assessment promptly and inform the regulatory authority about their position. Doing so and completing the reporting before the deadline will help you avoid hefty penalties. For further assistance or inquiries, please do not hesitate to reach out to us.