ESR (Economic Substance Regulations) Filing Deadline

Economic Substance Regulations Update: Notice issued by Ministry of Finance regarding ESR Filing Requirement and Deadline: The Ministry of Finance has issued notice which is intended to provide guidance to entities undertaking one or more Relevant Activities that are required to submit a Notification and/or Economic Substance Report in accordance with Cabinet Decision No 57 of 2020 concerning Economic Substance Requirements (“Decision 57”) and Ministerial Decision No 100 of 2020 (“Ministerial Decision 100”).

Requirement to file on the Ministry of Finance Portal

In accordance with Article 6.7 of Ministerial Decision 100 all Notifications and Economic Substance Reports must only be submitted electronically on the Ministry of Finance Portal.

Licensees that already submitted a Notification directly to their Regulatory Authorities are required to re-submit this Notification on the Ministry of Finance Portal once available.

Article 8.4 of Decision 57 provides that all Economic Substance Reports must be submitted within twelve months from the end of the Financial Year.

Deadlines for filing Notification and ESR reports and penalties for non-filing

Notifications due before the Ministry of Finance Portal goes live. 

The filing deadline for Notifications that are due before the Ministry of Finance Portal is available will be extended to 31 December 2020.

Licensees and/or Exempted Licensees that fail to submit their Notification along with the required supporting documents by 31 December 2020 will be issued a penalty of AED 20,000 under Article 13 of Decision 57 for failure to provide a Notification.

Notifications previously filed with Regulatory Authorities

Licensees and/or Exempted Licensees that have submitted a Notification to a Regulatory Authority before the Ministry of Finance Portal goes live (e.g. by the 30 June 2020 deadline) are required to resubmit their Notification by no later than 31 December 2020.

Licensees and/or Exempted Licensees that fail to resubmit their Notification by the aforementioned date shall be subject to a penalty of AED 20,000 under Article 13 of Decision 57 for failure to provide a Notification.

Economic Substance Reports due before the Ministry of Finance Portal goes live.

The filing deadline for Economic Substance Reports for a Financial Year commencing on or after 1 January 2019 and ending on or before 31 December 2019 shall be 31 December 2020.

Licensees and/or Exempted Licensees (where applicable) that fail to submit their Economic Substance Report within the aforementioned period shall be subject to a penalty of AED 50,000 under Article 14 of Decision 57 for failure to provide an Economic Substance Report.