UAE: Economic substance reporting requirements

UAE: Economic substance reporting requirements

The deadline is 30 June 2020 for filing “economic substance” notifications for licensees incorporated prior to 30 April 2019 with a fiscal year ending 31 December.

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The authorities have provided a user guide, an electronic format for the economic substance notification, and an email address where to submit the notification.

  • The reportable period is the financial period (for instance, 1 April 2019 to 31 March 2020) preceding the financial period in which the notification is due (i.e., the financial period ending before 30 June 2020).
  • Licensees in the process of “strike off” or liquidation are required to comply with the notification requirement. However, those that no longer have a commercial license are excluded from the notification requirement.
  • The term income from a relevant activity has been clarified as “gross income” earned from a relevant activity, as recorded in the books of account, and includes income that is generated outside of the UAE. This definition appears to deviate slightly from that provided previously by the Ministry of Finance.
  • Licensees that are 51% directly or indirectly owned by the UAE federal government, the government of an emirate, or any governmental authority or body of the UAE federal or emirate-level governments must file a notification in order to claim an exemption from having to file an economic substance return to demonstrate economic substance in the UAE. Such licensees may be asked to provide supporting documentation to substantiate their government ownership.


Read a May 2020 report prepared by the KPMG member firm in the UAE

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