What is the purpose of the Notification?
This purpose of this Notification is to provide DWTCA with certain initial information on the Licensee and its activities in the UAE, and is a prerequisite to filing an Economic Substance return for the Reportable Period (where required).
Who needs to submit a Notification?
An Economic Substance Notification must be filed if you are a UAE business that undertakes any of the following Relevant Activities during the relevant accounting period.
- Banking Business
- Insurance Business
- Investment Fund Management Business
- Lease – Finance Business
- Headquarters Business
- Shipping Business
- Holding Company Business
- Intellectual Property Business ("IP")
- Distribution and Service Centre Business
What happens if the information provided in the Notification is incorrect?
Providing incorrect or false information in the Economic Substance Notification is subject to penalties ranging from AED 10,000 to AED 50,000. Knowingly providing incorrect or false information or incorrectly claiming an exemption from the Economic Substance Regulations can result in the Licensee being deemed to have failed the Economic Substance Test for the relevant accounting period.
What happens if a Licensee does not submit a Notification, although it is required to do so?
Non-compliance with the obligation to file an Economic Substance Notification before the deadline is subject to penalties ranging from AED 10,000 to AED 50,000.
Can a single Notification be filed for multiple Licensees?
No, each Licensee must file an Economic Substance Notification on a stand-alone basis, irrespective of whether the Licensee is part of a consolidated group for accounting purposes.
How should the Notification or Report be filed?
The Economic Substance Notification and the Economic Substance Report must be submitted to the Ministry of Finance portal once it goes live, first week of December 2020.
More information about the Economic Substance Regulations can be found here.