The Dubai Airport Free Zone Authority (DAFZA) announced the deadline is 31 st of May 2020 for “economic substance” notifications for FY 2019 for all DAFZ-based entities. The economic substance notification format is available on DAFZA’s online customer portal.
Previously, RAK International Corporate Centre and Ajman free zone established 30 June 2020 as the deadline for their economic substance notifications. Other regulatory authorities have yet to announce the due dates for their economic substance notifications.
The economic substance rules were included in Cabinet of Ministers Resolution No. 31 of 2019 (30 April 2019) and introduced an “economic substance” requirement for all UAE entities that reflects the level and type of activity they undertake. Economic substance broadly reflects measures relating to employees, premises, management, and costs. There are also various regulatory filing requirements that need to be met in order to comply with the regulations. The UAE rules are, in part, a reaction to the UAE having been once placed on the EU’s list of non-cooperative tax jurisdictions.
UAE entities need to consider conducting an assessment of their FY 2019 economic substance to be ready with a position for the economic substance notification (and later economic substance reporting, if applicable).
Read an April 2020 report prepared by the RSM member firm in the UAE.