ESR Review & Consistency Advice

Economic Substance Regulations (ESR) is applicable in the UAE, Bahrain and Qatar in response to OECD’s BEPS Action 5 initiative to counter harmful tax practices. It is to ensure that businesses are engaged in genuine ‘Relevant Activities’ with offices, full time staff, operating expenditures, etc. Accurate and full disclosure of such evidence is required for businesses to stay ESR compliant. Here, the interaction of ESR with other tax elements, especially within the OECD’s BEPS framework, is significant. The disclosed ESR information must be reviewed in light of other tax and legal disclosures to ensure there are no mismatches.