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Previously, RAK International Corporate Centre and Ajman free zone established 30 June 2020 as the deadline for their economic substance notifications. Other regulatory authorities have yet to announce the due dates for their economic substance notifications.
The economic substance rules were included in Cabinet of Ministers Resolution No. 31 of 2019 (30 April 2019) and introduced an “economic substance” requirement for all UAE entities that reflects the level and type of activity they undertake. Economic substance broadly reflects measures relating to employees, premises, management, and costs. There are also various regulatory filing requirements that need to be met in order to comply with the regulations. The UAE rules are, in part, a reaction to the UAE having been once placed on the EU’s list of non-cooperative tax jurisdictions.
The economic substance rules were included in Cabinet of Ministers Resolution No. 31 of 2019 (30 April 2019) and introduce an “economic substance” requirement for all UAE entities that reflects the level and type of activity they undertake. Economic substance can broadly be considered to consist of employees, premises, management, and costs. There are also various regulatory filing requirements that need to be met in order to comply with the regulations.
The UAE regulations were issued, in part, as a response to European Commission concerns that resulted in the UAE being added to the EU’s list of non-cooperative tax jurisdictions. The regulations also may be viewed as further aligning UAE’s legislative framework to the standards set out in the OECD base erosion and profit shifting (BEPS) project. The regulations are similar to economic substance requirements recently implemented in jurisdictions such as the Cayman Islands and Jersey.
All UAE entities will need to examine whether they meet the “economic substance” requirements and consider how they will comply with the regulations, either by bolstering UAE economic substance or restructuring.
We Alya Auditors have specialized team on the Subject to support and guide you on the Compliance with Economic Substance Regulation with the following roadmap:
Step I: To study your Business Activities in detail and assess the applicability of Economic Substance Regulation on your activities. Also, to provide support and guidance on filing notification with the Relevant Authority.
Step II: To provide the guidance and support for compliance with the provisions of the Economic Substance Regulation, if your activity is falling under the regulation. To conduct Impact Study and Gap Analysis in order to assess whether the Business meets the Compliance test and to provide the recommendations.
Step III: Reporting with Regulatory Authority on or before the Due Date.
We are Quality driven professionals and its always our pleasure to serve & support you.
For any enquiry on the Subject you can reach out:
CA Bibin Jose
bibin@alyaauditors.com
+971524754007
Truly, let us know what service you are looking for and hence we can get back to you with more details.
Definitely, Alya Auditors is the one partner you need to ensure your business is built on accurate accounting books certainly, to spearhead greater growth and wider market reach.
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