Cabinet Decision No. 100 of 2023 on Determining Qualifying Income
Qualifying Free Zone Person for the Purposes of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses
The Cabinet
Qualifying Activities
Excluded Activities
Patents
Copyrighted Software
Commercial Property
Designated Zone
Kickstart Your Journey with a Free Consultation
Frequently Asked Questions
The ESR is a set of regulations that require entities engaged in specific business activities to have substantial economic presence and operations in the UAE.
Entities that conduct specific activities, such as banking, insurance, fund management, and lease-finance, are subject to the ESR. The regulations may also apply to companies engaged in certain high-risk intellectual property (IP) activities.
The primary purpose of the ESR is to ensure that entities engaged in relevant activities have substantial operations in the UAE, thereby preventing profit shifting and tax avoidance.
Substantial activities generally involve having adequate people, premises, and operating expenses in the UAE. The specific requirements can vary based on the type of activity.
If your business conducts relevant activities, you will need to ensure that it meets the substantial activities criteria, maintains proper records, and reports its compliance to the relevant authorities.
Entities subject to the ESR must submit annual reports to the Regulatory Authority, outlining various aspects of their business activities, financial information, and compliance with the substantial presence requirements.
Non-compliance with the ESR can result in penalties, including fines, suspension, or even the revocation of the entity's license.
The ESR does not specify a particular threshold for revenue or profit. Instead, it focuses on the substance of the business activities and operations in the UAE.
There are specific exemptions and exceptions outlined in the ESR regulations. These may apply in certain cases, such as where an entity is tax resident in another jurisdiction.
You can find detailed guidance and information on the ESR on the website of the UAE Ministry of Finance, as well as by consulting with legal and tax advisors with expertise in UAE regulations.
Begin Your ESR Adventure with a Free Consultation
What Our Customers Says
Initiate Your ESR Journey with a Free Consultation
Awards & Recognition
Website
www.bsauditing.com
sales@bsauditing.com
+971 52 322 6455
Phone Number
+971 52 322 6455
