Annual ESR Report for FYE 31st Dec 2020:
All the Entities fulfilling the following criteria will require to file ESR Report by 31st December 2021:
Failure to file the ESR report within the due date will attract a penalty of AED 50,000/-.
ESR Report is an annual requirement. Every year the entity needs to carry the assessment to identify whether it is conducting relevant activity & also ensure that the substance is met in the UAE.
If the entity is required to submit the ESR report then it is very important to assess that the substance test is met in the UAE. Below are the parameters of the Substance test:
Failure to meet the substance test will result in a penalty of AED 50,000/- for the first time and it may go up to AED 400,000/- for subsequent failure.
All the companies having their financial year-end/ accounting period/ reporting period as 30th June 2021 and conducting a relevant activity, will require to file ESR notification by 31st Dec 2021. Failure to meet the deadline will attract a penalty of AED 20,000/-.
We Emirates Chartered Accountants Group have a specialized team on the Subject to support and guide you on the Compliance with Economic Substance Regulation. Please feel free to reach us on the Subject.
CA Manu Palerichal, FCA, CMA
CA Dhara Yagnik, M.Com, ACA