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ECONOMIC SUBSTANCE ADVISORY
The economic substance requirements, also called ESR regulations imply that companies in the UAE mainland and free zones must submit an ESR notification along with an ESR report of all the relevant activities to the ministry of finance within the given timeframe.
The ESR regulations were introduced to deal with profit-shifting transactions, particularly in multinational companies to gain the advantage of the zero-tax policy only permissible for UAE-based businesses within the UAE.
The ESR regulations are pretty tough to meet. Companies have to minutely assess their activities to determine if they are conducting any relevant activity and as a result to demonstrate their related economic substance in the UAE. The following are the testing parameters for ESR compliance:
ESR is one of the crucial regulatory requirements that is being strictly implemented by the UAE authorities since its introduction in 2019. But as the regulation is relatively new, it is challenging for businesses to understand it comprehensively and stick to it.
Affiliated experts at Synergy Auditing can help you with ESR understanding and its compliance.
Here is how Synergy’s affiliated experts can help you:
The ESR regulations were introduced to deal with profit-shifting transactions, particularly in multinational companies to gain the advantage of the zero-tax policy only permissible for UAE-based businesses within the UAE.
The ESR regulations are pretty tough to meet. Companies have to minutely assess their activities to determine if they are conducting any relevant activity and as a result to demonstrate their related economic substance in the UAE. The following are the testing parameters for ESR compliance:
- Enough operating expenses
- Presence of a legitimate physical infrastructure and assets
- Business directed and managed in the UAE
ESR is one of the crucial regulatory requirements that is being strictly implemented by the UAE authorities since its introduction in 2019. But as the regulation is relatively new, it is challenging for businesses to understand it comprehensively and stick to it.
Affiliated experts at Synergy Auditing can help you with ESR understanding and its compliance.
Here is how Synergy’s affiliated experts can help you:
- Assessment of relevant activities
- Suggestions and guidance in demonstrating enough economic substance by ESR parameters and fixing any gaps the company may have.
- Preparing ESR notifications and ESR report
- Submitting the reports and notifications to the ministry of finance.