Economic Substance Reassessment in UAE

UAE businesses, including the ones that had already filed ESR notification, are required to file or re-file ESR notification through MoF’s dedicated portal. It is mandatory to file the ES report within 12 months following the end of the licensee’s financial year.

The UAE Ministry of Finance (MoF) has published templates for filing notifications and reports. According to the ES notification template, additional details must be provided for the following;

• All branches of a licensee carrying out relevant activities
• Confirm if the licensee meets the definition of ‘exempted licensee’ under the new ES Regulations
• Parent company, ultimate parent company, and ultimate beneficial owners of the licensee

Below listed are certain key observations about the report;

• Licensees get the opportunity to explain why CIGAs have not been performed in the UAE (if applicable).
• The same CIGAs are currently listed in the template for all activities, but it is expected to be rectified later on.
• Licensees are required to provide the accounting profit/(loss), along with the ‘relevant income’ earned from the relevant activities.
• It is mandatory to attach financial statements along with the report, but there is no clarity on whether these statements need to be audited or not.
• Licensees must determine their primary/ main regulatory authority, which becomes difficult when the licensee is carrying on multiple relevant activities which are governed by different regulatory authorities
• Detailed information must be provided if both the outsourcing providers are involved.
• Details regarding the parent company, the ultimate parent company, and the ultimate beneficial owners of the licensee must be provided.
• Differences in the information provided in the notification along with their reasons must be provided in the report.
• Licensees can also include any additional documentation and information to demonstrate substance if they want to.

The UAE introduced Economic Substance Regulations last year. 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 Failure to comply with the Regulations can result in huge penalties.

There have been certain changes to the rules and regulations pertaining to economic substance regulations in the UAE. The UAE Cabinet of Ministers recently issued Cabinet Resolution No. 57 of 2020 that includes a set of amended regulations and all licensees in the UAE are required to re-assess their current ESR classifications and align them accordingly to the latest regulations. Click here to know more.

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HLB HAMT - Audit, Tax, Accounting and Business Advisory

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Varun R Chandra

07:38 25 Apr 21

HLB Hamt is highly recommended! They have the quality of services that would satisfy your needs. I'm glad I found them.

Giuseppe Assi

06:20 31 Jan 21

I HAD A GOOD EXPERIENCE WITH HLB HAMT DUBAI. THEY HAVE A VERY PROFESSIONAL TEAM, GOOD QUALITY OF SERVICES, GOOD VALUE... FOR PRICE.I RECOMMEND THIS COMPANY.read more

Mohamed Sheriff

16:16 28 Jun 20

Experience with HLB Hamt in audit experience is great pleasure. They deploy well qualified accounts team for audits.... And the amount of checking they perform give the management of the company confidence that internal controls are well in place. We are glad to see they have high standard of audit practices.read more

218141 JOSEPH THOMAS

16:20 23 Jun 20

Professionally managed firm with commitment to the engagements taken. My company and its group are assigning our... requirements for last 12 years to HLB and we don’t have any negative remarks on any assignments.read more

PMI

07:14 23 Jun 20

In my opinion, HLB Hamt is one of the best professional firms in UAE after big4. Excellent client service, professional... and competent staff and timely delivery are their strength. Over the years they have developed the infrastructure and skill set to handle multiple verticals ie, audit, tax services, consulting, IT support etc.Wishing HLB Hamt team all the very best.read more

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08:28 21 Jun 20

Thank you Team HLB hamt...Your internal auditing team put the good amount of time and inputs in helping the... organisation making considerable improvements throughout the organisational working structure and helps in building the better business.Thanks.read more

Maharajan Subramaniam

18:17 06 Jun 20

High-Performing IT Teams, I'm impressed with the knowledge level of their deputed staff, audit procedures, and... checklist adopted. Mr. Vimal especially understand the requirement and provide solution not only technical feasibility and also considered budgeting. We’re confident in their abilities.read more

Mohammed L

08:07 05 Jun 20

We have been working closely with them on payroll services for quite sometime.They provide very professional... services,experts in domain and excellent support. Would recommend them.Cheers.read more

ROY ROSHAN VIVIAN

06:32 04 Jun 20

Very professional team. Vimal has always given us good solution advice for various Software and IT Infra projects. We... are very Extremely satisfied working with him and his team. Wishing them success.read more

Basil Daniells

05:55 03 Jun 20

I have worked with HLB as a partner of Sage for about 2 years, they were dedicated to the success of the partnership... and kept aligned with the business plan that was agreed between our two companies. They are always ready to go the extra mile for a customer and don’t shy away from challenging circumstances. Keep up the good work and wish you all the success in the future.read more

Amar Kashyap

19:28 02 Jun 20

Team of well qualified and organised professionals. Their reports are not based on numbers first they will understand... their client and their business. They are highly recommended and trust worthy.read more

Radz de Jesus

16:03 02 Jun 20

We're glad to have found HLB Hamt to conduct the IT audit and risk assessment for our organization. We have learned a... lot from their team during that first project. And since then, we've continued to be in touch with them. Mr. Vimal especially is very good at presenting technical concepts in simple yet interesting ways that non-IT and business people alike would easily catch. We are very happy with the professionalism and quality of service they provide. They leave their clients nothing short of satisfied. Highly recommended.read more

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