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Economic Substance Regulation

February 04, 2022

Annual ESR Compliance for Companies for Financial Year 2021/22

The Economic Substance Regulation (ESR) is an annual compliance requirement on Licensees which carry out the businesses under the Relevant Activity(s) for their respective financial year. Licensees engaged in Relevant Activity(s) under ESR must submit an ESR Notification and ESR Report on the Ministry of Finance – ESR Portal before applicable deadlines in order to avoid penalties levied by the Federal Tax Authority (FTA) on the ESR Portal.

Licensees must be aware that the FTA has commenced assessment of ESR Filings on ESR Portal and any failure to submit information or documentation related to financial information of Relevant Activity(s) or ESR Test parameters levy penalties ranging from AED 20,000 – AED 50,000 and reject the Exempted Licensee status.

Therefore, the Licensees are required to assess their business activities to determine whether they are engaged in any Relevant Activity(s), prepare financial information of the Relevant Activity(s) and supporting documents and submit the ESR Notification for and ESR Report for the Financial year-end 2021/2022.

How can we help? 

We, at MBG Corporate Services, have experienced legal and taxation experts who conduct the gap analysis and assess whether the company has complied with all ESR testing parameters and has all the required documents readily available and assist clients in the preparation and submission of supporting documents and ESR Reports.


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