Received Penalties For Non-Submission Of ESR Report?!. File An Appeal

Received Penalties For No-Submission Of ESR Report?!. File An Appeal

Did you successfully submit the Economic Substance Notification & Economic Substance Report of your company to the Ministry of Finance?

Did you get any response from the authority is after that?

Many licensees in the UAE have come across penalty emails from the Ministry of Finance.

Did you get any such penalty email?

If yes, do you know how to resolve the issues? In order to resolve such issues, we should know exactly the reason for receiving such a penalty ticket from the Authority. We have listed down some of the reasons why you might have received penalty emails

Situation in which Economic Substance Notification is submitted declaring a Specific Relevant Activity. Later the Economic Substance notification amendment was filed that it is not covered in Relevant activity neither earning relevant income in the Economic Substance Notification.

In this case, the company need not submit the Economic Substance Report. But the approval for Amendment on Economic Substance Notification might have taken the time and by then the Economic Substance Report Tab becomes active.

Economic Substance Report was not filed since it is not carrying relevant activity . Still, the penalty ticket may raise.

How to waive off the penalties generated from situations like above?

In the above-given scenarios, the Licensee or Exempted Licensee will have the option to Appeal.

Article 13 & 14 of the Economic Substance Regulation provides the offences & penalties for failure to provide Notification and Report, respectively.  The administrative penalty will be levied on that Licensee or Exempted Licensee who fails to submit Notification & Report (wherever applicable) as below:
Failure to submit    Penalty Amount

Failure to submit Penalty amount
ECONOMIC SUBSTANCE REGULATION [ESR] Notification AED 20,000
ECONOMIC SUBSTANCE REGULATION [ESR] Report AED 50,000

 

If there is a delay in submitting Economic Substance Notification or Economic Substance Reports, and if such delay is because of the ignorance of the Law, the chance of getting approval for waiving off the penalty cannot be assured through an appeal.

But there are genuine cases as mentioned at the beginning of this article, where the penalty can be appealed and removed. We are happy to resolve your issues by submitting the Appeal to the Authority.