Top 10 Audit Firms in Dubai, UAE
March 16, 2024
Top Audit firms in Dubai, UAE Alya Auditors Dubai stands as one of the Top 10 Accounting and Audit Firms in Dubai, UAE. In the
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The Regulations apply to financial years commencing on or from 1 January 2019. Entities that are within the scope of the Regulations are required to submit an annual Notification form to their Regulatory Authority, and complete and submit to the same Regulatory Authority an Economic Substance Report within 12 months from the end of their financial year (e.g. 31 December 2020 for entities with a financial year ending 31 December 2019).
An entity is not required to meet the Economic Substance Test and file an Economic Substance Report for any financial period in which it has not earned income from a Relevant Activity or if it meets the conditions for being exempt. A Notification form will need to be submitted regardless. Failure to comply with the Regulations can result in penalties, spontaneous exchange of information with the Foreign Competent Authority (as defined in Article 1 of the Regulations), as well as other administrative sanctions such as the suspension, revocation, or non-renewal of the entity’s trade license or permit.
The Reportable Period is always the financial period preceding the financial period in which the Economic Substance Notification is due.
Reportable period is the financial year defined in the Memorandum and Articles of Association of the Entity. In case the entity doesn’t have Memorandum and Articles of Association as part of incorporation, for example, sole proprietorship, etc., then the financial year can be defined in the form of a Board Resolution.
Economic Substance Regulations is another compliance requirement for entities registered in the UAE. The United Arab Emirates (UAE) Ministry initially enacted the Cabinet Resolution no. 31/2019 with effect from 30th April 2019 on Economic Substance Regulations in the UAE. This was followed by the Ministerial Decision 215 for the year 2019 giving directives for the implementation of the provisions of Cabinet Decision no. 31/2019. However, On 10th August 2020 New Economic Substance Regulation was introduced in the UAE via Cabinet Resolution 57/2020 which repealed and revoked Cabinet Decision no. 31/2019. Also, Ministerial Decision No 100 for the year 2020 replaced Ministerial Decision 215 for the year 2019.
So, Entities will now have to comply with Cabinet resolution 57/2020 & Ministerial Decision 100 for the year 2020 giving directives for the implementation of the provisions of Cabinet Decision no. 57/2020.
One of the four criteria in the framework of OECD is the absence of a requirement that the activity is substantial. In addition, the European Union is working to have a Tax Governance at Global Level in order to curb Tax avoidance, evasion. The Economic Substance Regulations is in consonance with the global standard set by the Organization for Economic Co-operation and Development (OECD) on Harmful Tax Practices. UAE also joined the all-inclusive framework of OECD on Base Erosion and Profit Shifting (BEPS) and is committed to having the minimum standards in the State. UAE is “No or Only Nominal Tax Jurisdiction” (NOON’s) environment and is in line with other jurisdictions with the same environment who are parties to this framework.
Economic Substance Regulation is applicable to all Licensee & Exempted Licensee carrying on the Relevant Activities in the UAE, including the Free Zone or Financial Free Zone; with effect from the year 2019.
Providing incorrect or false information in the Economic Substance Notification is subject to penalties ranging from AED 10,000 to AED 50,000. Knowingly providing incorrect or false information or incorrectly claiming an exemption from the Economic Substance Regulations can result in the Licensee being deemed to have failed the Economic Substance Test for the relevant accounting period.
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Top Audit firms in Dubai, UAE Alya Auditors Dubai stands as one of the Top 10 Accounting and Audit Firms in Dubai, UAE. In the
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An association of legally independent auditing & accounting firms in the UAE
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