United Arab Emirates, 14 October 2024: The Ministry of Finance has announced the cancellation of economic substance reporting requirements for companies for financial years ending after 31 December 2022, following Cabinet Decision No. (98) of 2024, which amends certain provisions of Cabinet Decision No. (57) of 2020 on economic substance requirements. This amendment aligns with the implementation of the UAE’s federal corporate tax system on business and corporate profits. His Excellency Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, stated that lifting economic substance reporting requirements for companies for financial years ending after 31 December 2022 allows businesses to focus on compliance with the UAE corporate tax system. “The amendment aims to enhance efficiency and tax compliance across the country, ensuring accurate application of tax legislation by all entities subject to it. This step is also part of the Ministry’s ongoing efforts to improve the tax system's efficiency and attract further investments,” he noted. The Ministry confirmed that while companies are no longer required to submit economic substance notifications or reports for financial years ending after 31 December 2022, they remain responsible for fulfilling compliance obligations for prior years, adhering to information or amendment requests from regulatory authorities or the Federal Tax Authority, and paying any penalties imposed by the Federal Tax Authority. For more information on the amendment, please visit the Ministry of Finance’s website at the following link regarding economic substance requirements [Economic Substance Regulations - Ministry of Finance - United Arab Emirates (mof.gov.ae)].
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