The ESR notification or Economic Substance notification due date has been officially released for JAFZA or the Jebel Ali Free Zone (Authority) in the United Arab Emirates (UAE). The due date is the 30th of June, 2020 and JAFZA is one of the key regulatory authorities on the basis of the Economic Substance Regulations in the country. JAFZA is held as a major base for innumerable businesses spanning 100+ global countries.
ESR notifications is the mandatory requirement that has to be filed by all the official licensees who are operating/executing relevant business activities under the Economic Substance Regulation UAE within the due date that has been given by the authority in question (like JAFZA in this case).
List of Relevant Activities of Economic Substance Regulation
Here are the activities which are considered relevant under UAE’s Economic Substance Regulation:
- Finance or Lease
- Investment or Fund Management
- Intellectual Property
- Holding Companies
- Headquarters of Businesses
- Distribution Centers or Service Centers
These are the activities which are deemed relevant under the ESR UAE and all holders of licenses in JAFZA holding any of these activities for FY2019, are required to file their ESR notifications on or prior to the 30th of June, 2020. The holder of the license has the responsibility to make sure of an assessment as to whether the entity conducts any relevant business activity under the regulatory authority. JAFZA holds no responsibility for any assessment procedure with regard to eligibility/applicability of ESR UAE. Only businesses executing relevant business activities as mentioned above, will have to file the Economic Substance Notification in JAFZA. The timelines should also be kept in mind by you.
You May Also Read : Economic Substance Regulations (ESR) in the UAE
For example, suppose any business or entity present in JAFZA has its financial year between 1st October 2018 and 30th September, 2019. In such cases, they are not required to file their Economic Substance Notification (ESR Notification) on the 30th of June, 2020. The law will not apply for such organizations between the 1st of January and 30th of September, 2019. The very first applicable filing period will be between 1st October, 2019 and 30th September, 2020.
You May Also Read : Economic Substance Notification Due Date is Declared for RAKEZ
Non-Compliance and Subsequent Penalties
Penalties for non-compliance with ESR (Economic Substance Regulations) include the following:
- Fines of AED 10,000-50,000 for the first year.
- AED 50,000-300,000 from subsequent year onwards.
- Suspension of license
- Non-renewal or revocation of license
GCC Filings will help you out with ESR, VAT registration and filing, company incorporation, auditing, accounting and a whole host of other vital company services. You can count on GCC Filings for transparent and efficient solutions in the UAE.