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Newsletter 12/2020

Business News Dubai | Economic Substance

 

Economic Substance Notification & Report Templates Now Available

Following the publication of the new Economic Substance Regulation and related guidance in August 2020, the UAE Ministry of Finance (“MOF”) issued: (i) the templates for the economic substance notification (“Notification”) and report (“Report”); as well as (ii) the notice indicating the deadlines for the Notification and the Report submission.

 

Highlights

1. Portal Going Live:
Under the new guidance, the Notifications and Reports must only be submitted electronically via the MOF Portal, which is now live.

2. MOF Notification Submission:
Where the Notifications are due before the MOF portal “goes live”, the submission deadline has been extended to 31 December 2020. For example, this extension applies to licensees with financial years ending 31 March 2020 where the due date was originally 30 September 2020;

Where licensees have previously submitted Notifications under the old economic substance regime, licensees will be required to re-submit the Notifications by 31 December 2020.

3. MOF Report Submission:
Where licensees have a short financial year ending before 31 December 2019, the deadline for the submission of the Reports has been extended to 31 December 2020. For example, this extension applies to licensees with a short financial year commencing on 1 April 2019 and ending on 31 October 2019.

4. Notification Template:
In addition to information relating to the financial year and relevant activity / income, the Notification requires all the licensees and exempted licensees to (i) disclose the ultimate beneficial owner (“UBO”) details; (ii) branch details (if a relevant activity is performed by a branch) and (iii) self-certification of the exempt status for exempted licensees.

5. Report Template:
Licensees are particularly required to provide their financial information and statements, core income activity details, UBO details, information on whether they are directed and managed in the UAE and have adequate local employees and assets.

 

What should you do next?

All Licensees and exempted licensees must submit the Notification electronically on the MOF Portal by 31 December 2020, even if they’ve already made the submission under another platform.

All Licensees shall file the first Report on 31 December 2020

 

What if I do not comply?

The failure to comply with statutory economic substance obligations under the new Economic Substance Regulation has serious consequences and may result in the suspension / revocation of your license and administrative penalties ranging from AED 20,000 to AED 400,000.

How can we help?

As the leading law firm in MENA and with strong corporate structuring and tax expertise, we can guide you through the Economic Substance regime, and particularly assist you with:

  • the Notification preparation/ submission; and
  • the Report preparation/ submission.

Please do not hesitate to contact Al Tamimi & Company’s Tax Team and Corporate Structuring Team if you require any assistance.

Click HERE to follow Al Tamimi’s Tax Team’s LinkedIn page for more updates on tax developments in the Middle East.

 

Key Contacts:

Izabella Szadkowska
Partner, Corporate Structuring
i.szadkowska@tamimi.com

Shiraz Khan
Head of Taxation, Corporate Commercial
s.khan@tamimi.com

 

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