The UAE updates its Economic Substance Regulations

The United Arab Emirates (UAE) has signed the Inclusive Framework (IF) of the Organization for Economic Co-operation and Development’s (OECD) on Base Erosion and Profit Shifting (BEPS)in May 2018. As a result, the UAE is committed to introduce the following BEPS minimum standards:
• BEPS Action 5: Countering Harmful Tax Practices, considering transparency and substance.
• BEPS Action 6: Preventing the granting of Treaty benefits in Inappropriate circumstances.
• BEPS Action 13: Transfer Pricing Documentation and Country by Country Reporting.
• BEPS Action 14: Tax Dispute Resolution.
The United Arab Emirates (UAE) has issued the Cabinet Resolution No. 31 of 2019 introducing the Economic Substance Regulations (ESR). The introduction of the UAE Economic Substance Regulations was an important step to fulfill the UAE commitment towards BEPS minimum standards, to align the UAE tax regime with the global tax best practices and also to implement the directives OECD BEPS project.

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