Economic Substance Regulation (ESR) Reporting - March Reminder
03 March 2022
Businesses with a financial year of 31 March 2021 are reminded that the due date for the ESR reporting is 31 March 2022 if they performed a Relevant Activity during the financial year. The ESR report is required if the business is earning income from the Relevant activity reported and is not eligible to claim exemption under ESR.
Businesses with a financial year ending 30 September 2021 are required to file ESR notification by 31 March 2022 if a Relevant Activity is undertaken. This notification would be required even if the same activity was performed and notified for financial year ended 30 September 2020.
ESR notification and reporting are two separate filings and is an annual obligation for licensees within the scope of ESR. Failure to submit by the required deadlines would attract penalties ranging from AED 20,000- AED 400,000. Considering this is the second year of filing, the higher penalty of AED 400,000 shall apply for delay in filing ESR report if the business was not compliant in the previous year.
Below is the summary of the upcoming deadlines for reference:
If you have missed filing the ESR notification on time, we recommend that the notification is filed at the earliest to avoid any delay in ESR reporting.
With the introduction of Corporate tax and Transfer Pricing, there may be a change in ESR. However, the clarification on this is awaited from the Ministry of Finance.
Please contact Mufaddal Safdari, Amrita Chandwani or your existing Tax team contact, if you need any support for ESR.