ESR Deadlines

ESR Filing Deadline  

The ESR regulations, which apply to some company operations conducted in the UAE, were implemented by the government of that country. These regulations aim to ensure that companies operating in the United Arab Emirates are legitimate participants in the regional economy.

Businesses required to comply with UAE ESR compliance should be aware that the ESR notification deadline in the UAE typically falls within six months of the financial year-end,The ESR report deadline is usually 12 months after the end of the financial year. To ensure timely ESR filing notification and reporting, companies must stay updated on the regulatory requirements and prepare the necessary documentation in advance.

ESR Notification  

What is the purpose of the Notification?  

The Notification serves to give the Regulatory Authorities some preliminary information about Licensees and their operations in the United Arab Emirates during the applicable Reportable Period. Submitting this initial notification for ESR filing is a prerequisite for filing an Economic Substance Report for the same period, if applicable, as it lays the groundwork for further compliance.

Who needs to submit a Notification?  

If you are a partnership (limited liability partnership, general partnership, etc.) or corporate entity (limited liability company, public joint stock company, private joint stock company, etc.) and you engage in any of the following Relevant Activities in the UAE during the relevant Financial Year, you must file a notification.

• Financial Institutions
• Companies that Provide Insurance
• Enterprises that Manage Investment Funds
• Businesses That Finance Leases
• Headquarter Enterprises
• Shipping Companies
• Businesses of Holding Companies
• Companies with Intellectual Property
• Businesses in Distribution and Service Centers

A Licensee is a business located in the United Arab Emirates that engages in one or more of the aforementioned activities within the relevant Financial Year. An entity is referred to as an Exempted Licensee when it engages in one or more of the aforementioned activities but is exempt from specific obligations under the Economic Substance Regulations.

Both a Licensee and an Exempted Licensee must send a Notification, just to be clear.

ESR Notification Deadline  

 The Notification must be finished within six months of the Licensee's fiscal year ending.

Penalties for Failure to provide a Notification  

An administrative penalty of dirhams twenty thousand (AED 20,000) will be imposed on the Licensee or Exempted Licensee who failed to submit the Notification by the deadline.

As previously mentioned, a licensee or exemptioned licensee faces a penalty of dirhams fifty thousand (AED 50,000) if they give false information to the National Assessing Authority or the Regulatory Authority and are aware of the inaccuracy at the time the information is provided but choose not to notify the authorities.
 

Conclusion  

Staying on top of ESR filing and reporting deadlines is key to staying compliant in the UAE. Missing them can lead to penalties, so it’s important to plan ahead.

Reyson Badger's strong international tax team, which has been heavily involved in advising customers on ESR concerns, has been offering the best management consulting services. We support you in ESR Filing and Reporting in UAE .