ESR Development and Deadline in the GCC Countries


ESR Development and Deadline in the GCC Countries


With the upcoming deadlines for ESR reporting on 31 December 2021, here is what you need to know to stay compliant and avoid penalties in the UAE.


  • Licensee - All UAE onshore and free zone companies that undertake one or more "Relevant Activities" during the Financial Year ("FY") are required to file a Notification and submit an Economic Substance Report to the UAE Ministry of Finance ("MoF") portal.


  • Compliance requirement under Economic Substance Regulations ("ESR") is annual.
  • For companies with FY ending on 31 December 2020:
    • Notification had to be submitted by 30 June 2021.
    • Economic Substance ("ES") Report must be submitted by 31 December 2021.

Penalties for non-compliance are as follows:

  • Failure to file the Notification within 6 months from the end of the FY - AED 20,000.
  • Failure to file the ES Report within 12 months from the end of the financial year - AED 50,000.
  • Consecutive violations during two consecutive FYs - AED 4000,000.

A Broader look into the other GCC Countries


  • On 17 October 2021, the Qatar MoF issued Decision No. 20 of 2021 requiring "qualifying entities" that carry on specified activities to demonstrate ES in Qatar from 4 November 2021, if they wish to benefit from a preferential tax regime.
  • Qualifying entities will be required to comply immediately, based on their date of incorporation.
  • Penalties for non-compliance are to be determined in due course.

Kingdom of Bahrain

  • MoICT has issued a circular on 10 August 2021 mandating the filing of ESR Return for applicable entities through ITIES web portal within 3 months from the FY end.
  • The filling period for ES returns for the FY end of 2020 will be from 8 August 2021 to 12 September 2021.
  • Penalties for non-compliance include warning notices, suspension/termination of Commercial Registration, financial penalties up to BD 100,000.

KSA, Oman, and Kuwait - Not yet regulated

Key takeaways Licensees must:

  1. Take note of the ESR deadlines
  2. Ensure that all ESR requirements are met in a timely manner to avoid possible penalties from the relevant Tax Authority.

How can Crowe Help?

  1. Determine the appropriate Relevant Activity
  2. Review past fillings (Analyze/ Re-analyze the applicability of ESR)
  3. Assess if the entity meets the ES Test
  4. Assist in submitting the Notification and ES Report 
  5. Assist in responding to queries from relevant UAE authorities
  6. Assist with the appeal procedure, if applicable.

Contact Us

Markus Susilo
Markus Susilo
Partner- Payroll and Indirect Tax