ESR were introduced in the UAE in 2019. The purpose of the ESR is to prevent businesses, typically multinational corporations, from artificially shifting profits to jurisdictions that impose little or no income tax similar without having substantial activities in that jurisdiction to take advantage of their tax laws. The UAE is considered one of these jurisdictions.

Accordingly, the ESR impose an obligation on all entities that carry geographically mobile business activities to annually submit a comprehensive report to the authorities. The aim of this is to demonstrate that these businesses have substance and legitimate operations in the UAE. The first filing season, in relation to FY19, was completed by the end of 2020. Businesses should now be looking at the second filing season.

Given the importance of the ESR, we developed the first of its kind ES guide with a view to support UAE businesses with their reporting obligations. We launched the guide by hosting a 60-minute virtual event where our ES pracitioners provided an overview of the guide and the value it brings. We also provided a technical update on the latest ES developments and insight on how companies are dealing with ES compliance requirements including various available sourcing models. 

 Watch this webinar for more insights.

The UAE ESR are applicable retrospectively from 1 January 2019 and the first compliance cycle has now passed. Potential ESR implications for FY20 and FY21 are currently being determined. Businesses can leverage the lessons learnt from the past year to improve their approach going forward.  

In the light of the above, Deloitte held a 60-minute webinar aimed at guiding businesses through the upcoming FY20 ESR filing obligations. The topics covered during the session included:

• Overview of the upcoming FY20 ESR compliance deadlines;
• Lessons learnt from the first compliance cycle;
• Best practices in connection with some of the relevant activities and ESR;
• Post-filing enforcement and appeals;and
• Elements that are still unclear. 

Watch this webinar for more insights.