Economic Substance Regulation in the Dubai is another set of compliance requirement to be followed by all business entities. The Economic Substance Regulations is in agreement with the global standard set by the Organization for Economic Co-operation and Development (OECD) on Harmful Tax Practices.So with an objective to curb harmful tax competition, on December 1, 1997, the European Union (EU) adopted a resolution on the code of conduct of business taxation. Code of conduct group on business (COCG) was established to assess the tax measures and regimes. In the past years, the world economy has experienced a shift of trade from land-based supplies to internet-based supplies which has produced a slight though complex looking ambiguity in the taxation methods to be followed for the online structures.
In order to formalize the governance schemes in such a scenario, the EU came with a set of economic substance regulations following certain criteria that are aligned with the International standards that other states can comply with them normally.