The Economic Substance Regulations have been in effect in the UAE since April 2019 and all UAE onshore and Free Zone companies are required to annually inform the relevant regulatory authority under which they fall of whether or not their activities are a “relevant activity” and that they accordingly have to comply with the requirements for economic substance. The effective date for notifications is 1 January 2020 and a report on compliance with the substance rules is due before 31 December 2020 if relevant activities are conducted.
The DIFC and ADGM announced a deadline of 31 March 2020 for the submission of the notification of whether relevant activities are conducted or not. Due to the current working situation in the UAE, in both onshore and the free-zones as a result of COVID-19, both the DIFC and ADGM have postponed the deadline to a date that is still to be determined and which will be communicated in due course.
For RAK ICC and Ajman Free Zone the deadline for submission remains at 30th June 2020.
We recommend that both DIFC and ADGM companies that have not yet attended to the necessary notifications urgently consider taking advantage of the extension period and not leave it too late again to comply when the new deadline is announced.
Should you require assistance in assessing your obligations and preparing the necessary submissions, BSA is able to assist you with all your compliance requirements.
Authored by Head of Indirect Tax and Conveyancing, John Peacock