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ESR Notification Filing and Online Application User Manual

Click to start the ESR notification filing.

GENERAL GUIDANCE
1. The fields marked with ‘*’ (asterisk) are mandatory to be filled.
2. Once the submission is done, it gives a pop up of “request success”. The process for ESR notification is complete only when you receive such confirmation. If you require a copy of your submission, please print the form prior to submission.
3. Non-compliance with the obligation to file an ESR notification within the deadline may be subject to a penalty under the UAE ESR laws spanning from AED 10,000 to AED 50,000.
4. Kindly provide correct and accurate information. SAIF Zone may get in touch with the licensee to confirm the details submitted or request additional details. Providing incorrect or false or misleading information in the ESR notification form will be subject to penalties spanning from AED 10,000 to AED 50,000. This can further result in the licensee being treated as having failed the ESR test for the relevant financial year.

BASIC INFORMATION
First part of this page contains basic information about the Licensee. Fill in the general details like Licensee Name, License number, Financial year end, Legal form and the registered office address.
The user will be required to fill in the details manually and no details will be auto-populated on the notification.

License Detail

Terms Explained from Above Screenshot

Licensee name, License number, Legal form and registered office address
Provide these details as per the SAIF Zone license.

Financial Year End
The financial year-end or accounting reference period is the date on which the Licensee's financial year ends (and to which the Licensee's financial accounts are prepared). In the absence of a financial year-end / accounting reference period (e.g., where the Licensee is not required to have a financial year-end / accounting reference period), the anniversary of the Licensee's incorporation date should be used.


REPORTABLE PERIOD

Reportable Period

The Reportable Period is the financial period to which the Economic Substance Notification relates. Licensees are required to include the "start" and "end" date of the relevant financial period. Financial years commencing on or after 1 January 2019 are subject to ESR.

A Licensee whose financial year corresponds to the calendar year would include the following:
Start date: 1 January 2019
End date: 31 December 2019

A Licensee incorporated on 1 July 2019 with a 31 March 2020 financial year-end, would include the following:
Start date: 1 July 2019
End date: 31 March 2020

Licensees that are in the process of liquidation are required to comply with the Economic Substance Notification requirement in respect of Reportable Periods ending on or before the completion of the liquidation process.

Licensees that no longer have a commercial license, trade license or permit before the Economic Substance Notification filing deadline for a relevant Reportable Period are not required to file a Notification for the Reporting Period ending on the date of liquidation.

The reportable period for ESR notification due on 30 June 2020 shall be financial years commencing on or after 1 January 2019 and ending on 31 December 2019.

RELEVANT ACTIVITIES

Relevant Activities

A ‘substance over form’ approach must be used to determine whether the Licensee carried on a Relevant Activity. This means looking beyond what is stated on the commercial license, trade license or permit to the activities actually undertaken during the Reportable Period.

For guidance on the Relevant activities, please refer the MoF guide here, our FAQ’s and our webinars.

Where a licensee undertakes more than one Relevant Activity, all such activities should be considered in the ESR notification.

Earned Income from Relevant Activity
Income from a Relevant Activity means all gross income earned from that activity as recorded in the books and records of the Licensee for the Reportable Period prepared under applicable accounting standards, including income that is generated outside of the UAE.

Income from Relevant Activity Taxable outside UAE
Please indicate whether the gross income from the Relevant Activity (ies) was fully or partially subject to tax in a jurisdiction other than the UAE. For example, income from a Relevant Activity could be subject to tax outside the UAE if the Licensee has a taxable presence / permanent establishment in a foreign country that reports all or part of the income from the Relevant Activity in its tax return.


High Risk IP Business
Licensee needs to fill the details regarding Parent Company, Ultimate Parent Company and Ultimate Beneficial Owner if they are involved in High Risk activity business. This information will be automatically exchanged by the MoF with the relevant jurisdictions.

Please refer to Cabinet Ministerial decision and the Relevant Activity Guide for information in respect of High Risk IP Licensees.

Parent Company/Ultimate Beneficiary Owner Detail
The Parent Company of the Licensee is the entity that directly:
(a) holds a majority of voting rights in the Licensee; or
(b) has the right to appoint or remove a majority of the boards of directors of the Licensee; or
(c) controls alone, pursuant to a joint arrangement with other shareholders or members, a majority of the voting rights in the Licensee; or
(d) has the right to exercise, or actually exercises, dominant direct influence or control over the Licensee.

The Ultimate Parent Company of the Licensee is an entity of a group that:
(a) owns directly or indirectly a sufficient interest in the Licensee, such that it is required to prepare consolidated financial statements under accounting principles generally applied in its jurisdiction of tax residence, or would be so required if its equity interests were traded on a public securities exchange in its jurisdiction of tax residence; and
(b) there is no other entity of such group that owns directly or indirectly an interest described in subsection (a) above in the first mentioned entity.

The Ultimate Beneficial Owner of the Licensee is an individual who owns directly or indirectly twenty five percent (25%) or more of the share capital of a Licensee. A Licensee may have one or more Ultimate Beneficial Owners.

ADDITIONAL INFORMATION

Additional Information

Government Owned Entity
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 an Emirate government must file an Economic Substance Notification in order to claim an exemption from having to file an Economic Substance Return and to demonstrate economic substance in the UAE. Such Licensees may be asked to provide supporting documentation to substantiate their government ownership.

Tax residency outside UAE
A Licensee is regarded as tax resident in a jurisdiction other than the UAE if the entity is subject to corporate income tax on all its income from a Relevant Activity by virtue of its tax residence, domicile or any other criteria of a similar nature in that other jurisdiction.

Where a Licensee notifies that it is tax resident outside the UAE, it will be required to provide the Regulatory Authority with appropriate evidence to support that foreign tax residence. This may include copies of tax returns filed in the foreign jurisdiction, a tax residence certificate from the foreign jurisdiction, or proof of payment of corporate income tax paid in the foreign jurisdiction.

DECLARATION

Declaration

Designated Contact Person
The designated contact person can be anyone who has the authority to respond to queries raised by SAIF Zone or any authority in relation to ESR and provide further documents. Examples of a "Designated Contact Person" include:
• The Licensee's General Manager
• The Licensee's Director; or
• The Licensee's Compliance Officer


Penalties for incorrect information

Penalties ranging from AED 10,000 to 50,000 if the Licensee knowingly provides inaccurate information in the Notification, and does not correct the information provided. In certain circumstances (e.g. where a Licensee knowingly claims an exemption, even though the Licensee does not meet the requirements and this is not corrected), the Licensee could be deemed to have automatically failed the Economic Substance test.


SUBMISSION

Once the form has been completed, please click “Save”. You may also save and incomplete form and come back later to complete it.

The completed form would be available for your review after it is saved. If any changes are required, you can click “Edit” to edit the completed form. If no changes are required, click “submit”. Should you require a copy of your submission, please print the form prior to clicking “submit”.

Once the form is successfully submitted, the screen below appears:

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