Wed 24-06-2020 19:51 PM
ABU DHABI, 24th June, 2020 (WAM) — The Ministry of Finance, MoF, today indicated that all companies in the UAE that engage in any of the relevant activities within the fiscal year ending 31st December, 2019 must submit a notification of Economic Substance Regulations to its Regulatory Authority no later than 30th June, 2020 in order not to be subject to administrative penalties.
Younis Haji Al Khoori, Under-Secretary of the MoF, said, “Seeing the Economic Substance Regulations system come into effect confirms the UAE’s commitment to international standards for tax transparency, fair taxes and full compliance with tax policies, and its full commitment to the implementation of OECD standards as well. The country will continue its consultations with its partners in the European Union and member states of the OECD to ensure that international standards in taxation are applied, and that tax evasion is addressed in accordance with the best global standards.”
He added, “The implications of the COVID-19 outbreak on Relevant Activities that were directly affected by government restrictions (such as travel bans, self-isolation measures, social distancing etc.) will be taken into consideration when assessing whether a UAE-licenced company has met the Economic Substance Regulations test for the relevant period.”
There are nine commercial activities that are included in the Relevant Activities of the Economic Substance Regulations test. These Are banking, insurance, investment fund management, financial leasing, headquarters and shipping operations, in addition to holding and intellectual property companies, distribution and service centres. The definition of each of these activities can be found in the relevant activities guide available on the ministry’s website.
Underlining the UAE’s commitment as a member of the OCED Inclusive Framework and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, the UAE introduced a Resolution on the Economic Substance (Cabinet of Ministers Resolution No. 31 of 2019, the “Regulations”) on 30th April, 2019.