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On Friday, the Ministry of Finance called on companies and institutions in the UAE whose fiscal year ends on June 30, 2022, to submit a report on their realistic economic activities no later than June 30, 2023.
Finance said: “Companies whose fiscal year ends on June 30, 2022 must submit a realistic economic activities report no later than June 30, 2023, unless they claim exemption from any requirements, or provide evidence that they have not achieved income from relevant activity within its notification.
The ministry revealed, on its website, the relevant realistic economic activities, which include; Banking business, insurance business, investment fund management business, financial leasing business, headquarters business, shipping business, holding company business, intellectual property business (IP), distribution center business or services.
Finance explained that the regulations of realistic economic activities in the country require local companies located within the UAE lands, those registered in free zones, and some other forms of business that engage in any of the “related activities” defined and mentioned above, to maintain and prove their “existence.” economically sufficient in the Emirates with regard to the activities for which the “realistic economic activity test” is taken.
systems application
The Ministry of Finance said: “The regulations apply to fiscal years starting from January 1, 2019, and establishments that fall within the scope of application of the regulations are required to submit an annual notification form to their regulatory authority, and to write and submit to the same regulatory authority a report on realistic economic activity within A deadline of 12 months following the end of its fiscal year (i.e. on December 31, 2020 for establishments whose fiscal year ends on December 31, 2019).
And she added, “With regard to establishments that did not achieve revenues from a related activity, or those that meet the exemption conditions, they are not required to fulfill the realistic economic activity test, nor to submit a report on the economic activity that falls on any financial period.”
The Ministry of Finance confirmed that failure to comply with the regulations may result in fines, or an automatic exchange of information with the foreign competent authority (as defined in Article 1 of the regulations), in addition to other administrative penalties, such as; Suspension, cancellation or non-renewal of the trade license or permit of the concerned establishment.
