Economic Substance rules were introduced in the UAE in 2019, requiring UAE businesses that undertake certain "Relevant Activities" to maintain and demonstrate adequate substance (for example: employees, premises and expenditures) in the UAE relative to the activites they undertake.
Over the past few years, we have witnessed a number of queries and audits carried out by the Federal Tax Authority for UAE in-scope businesses which have resulted in significant penalties for busiensses for non-compliance.
With the introduction of the Federal Corporate Tax regime in the UAE, which imposes a requirement for certain UAE entities (for example: Free Zone businesses) to maintain sufficient substance in the UAE to be able to benefit from a 0% Corporate tax rate, it is more crucual than ever for UAE businesses to ensure ESR compliance.
Our Tax team at Grant Thornton UAE is extending its support to all businesses in conducting:
- Economic Substance impact assessment/gap analysis
- ESR compliance service - assistance with filing Economic Substance Notification
- ESR compliance service - assistance with filing Economic Substance Report
- Assistance with ESR appeal and audit cases
If you have any questions or would like to find out more about how we can help, please contact us.