close
Share with your friends

UAE: New economic substance regulations for UAE companies

UAE: Economic substance regulations for UAE companies

New regulations provide economic substance rules for UAE companies.

1000

Related content

The economic substance rules were included in Cabinet of Ministers Resolution No. 31 of 2019 (30 April 2019) and introduce an “economic substance” requirement for all UAE entities that reflects the level and type of activity they undertake. Economic substance can broadly be considered to consist of employees, premises, management, and costs. There are also various regulatory filing requirements that need to be met in order to comply with the regulations.

The UAE regulations were issued, in part, as a response to European Commission concerns that resulted in the UAE being added to the EU’s list of non-cooperative tax jurisdictions. The regulations also may be viewed as further aligning UAE’s legislative framework to the standards set out in the OECD base erosion and profit shifting (BEPS) project. The regulations are similar to economic substance requirements recently implemented in jurisdictions such as the Cayman Islands and Jersey.

All UAE entities will need to examine whether they meet the “economic substance” requirements and consider how they will comply with the regulations, either by bolstering UAE economic substance or restructuring.


Read a June 2019 report prepared by the KPMG member firm in the UAE

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal