Extension of Economic Substance Regulations (ESR) Notification and Filing Deadline as Per Recent Announcement of The Ministry of Finance, MOF UAE

The Ministry of Finance, MOF UAE has announced on 31st December 2020 EXTENDING DEADLINE for submission of ESR Notification and report through a circular in the Ministry’s official website.

All business entities in the UAE undertaking relevant activities as per law and required to submit the annual ESR Notification and Economic Substance Report must do so to the regulatory authority no later than 31st January 2021 to avoid administrative penalties.

All applicable companies falling under this ESR notification and filing requirements must submit a notification and supporting documents online via MOF portal latest by January 31st as no further extension will be given.

The Ministry extended the deadline to support businesses that might have been adversely impacted due to Covid 19 and partly because the MOF ESR portal only went live during the first week of December 2020 when MOF started getting ESR notifications and reports through this portal.

MOF has recently conducted virtual seminars to update companies on the use of the ESR portal and help them submit their necessary ESR documents electronically. More than 5000 companies participated in these seminars.

MOF has also released a set of templates for ESR Notification and ESR Report useful for preparing and analyzing ESR related information that needs to be submitted as a mandatory compliance requirement.

On 10th August 2020, the cabinet of Ministers issued Resolution No. 57 of 2020 concerning Economic Substance Regulations, “Resolution 57” which amended and repealed Resolution 31.

The MOF, UAE strongly recommends that all business entities assess and reassess whether and which of their business activities fall within the scope of the Economic Substance Regulations and how satisfactorily the businesses can ensure Economic Substance Test in respect of each relevant activity.