What is Economic Substance Regulation for DAFZA in UAE?
Dubai Airport Free Zone (DAFZA) is an approved Regulatory Authority for Economic Substance Regulation in UAE. DAFZA is currently a sanatorium to more than 1,600 global firms from all over the planet. It is gazing ahead to draw in more companies to the free zone.
Economic Substance Notification is a necessity to be listed by all the licensees governing Relevant Activity in UAE by the jurisdiction. DAFZA Regulatory Authority simply supervises statutes of law and not culpable for controlling an appraisal on the applicability of Economic Substance Regulations in the UAE.
Relevant activity includes the Banking Business, Insurance Business, Investment Fund Management Business, Lease-Finance Business, Holding Company, Headquartered Business, Shipping Business, Intellectual Property Business, and Distribution & Service Centre Business.
What is to be disclosed in the Economic Substance Notification?
Businesses that come under the authority of Economic Substance Regulations UAE should proffer the Economic Substance Notification with DAFZA that includes the following:-
- Financial year-end;
- Whether or not handles a Relevant Activity;
- Whether or not earned any income from the Relevant Activity;
- Whether any earning by the Relevant Activity is totally or partially subjected to a tax outside of the UAE; and
- Whether or not exempt due to Government control.
Should all the companies in DAFZA subordinate to the Economic Substance Notification?
No, not all corporations in DAFZA are expected to show the Economic Substance Notification. Only businesses forwarding Relevant Activity in DAFZA should imperatively record the Economic Substance Notification. The assent of the Economic Substance Notification is regulated by a deadline as per the law. The deadline needs to be met stringently to avoid penalty.
What occurs in the situation of Non-compliance with Economic Substance Regulations in UAE?
If any licensee omits to comply with the obligation of filing the Economic Substance Notification, then such Licensee may have to experience disciplinary results. The penalty varies from AED 10,000 to AED 50,000 in the first year of its Non-Compliance, and for ensuing non-compliance, it ranges from AED 50,000 to AED 300,000. Further, neglect by an Entity to comply with Regulation can also result in the automatic transfer of Data with Foreign Competent Authority, potential termination, and non-renewal of registration.
How can an Accounting firm help Economic Substance Regulations in UAE?
Accounting firms have a distinct segment for ESR to assist and oversee the Agreement with Economic Substance Regulations in UAE with the following process:
- Quality-driven professionals, and it is always their desire to assist & support. They shall further overwhelm the matters of applicability with this statute and support with Economic Substance Notification.
- Supervise Enterprise Ventures in detail and consider the applicability of Economic Substance Regulation (ESR) on the ventures. It also furnishes direction and supervision on filing Economic Substance Notification with DAFZA.
- Pitch coaching and motivation for agreement with the methods of ESR to direct Impact Study and Gap Analysis. It values whether the firm satisfies the Compliance inquiry and proffers advice.
For enquiries, call +971 5679 52590 / E-mail: info@aviaanaccounting.com
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Penalties for Non-Compliance with Economic Substance Regulations
Requirements to meet Economic Substance Test
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