Economic Substance Regulations appeal user-guide is used to provide assistance to the Licensees or Exempted Licensees on how to submit their ESR appeal request to the Federal Tax Authority. In accordance with the Cabinet Resolution Number 57 of 2020, the Federal Tax Authority is designated as the National Assessing Authority and shall head and decide on ESR appeal request The purpose of appeal user-guide is to help all persons who would like to submit an ESR appeal request to the National Assessment Authority to appeal against the decisions of Economic Substance Regulations administrative penalties issued to the Licensees or the Exempted Licensees.
The ESR appeal request is the service provided under Economic Substance Regulations which is based on Article 17 of the Cabinet of Ministers Resolution Number 57 of 2020. The Licensees or the Exempted Licensees may submit ESR appeal for any of the following reason:
- The violation attributed to the Licensees, or the Exempted Licensees is not committed by them.
- The administrative penalty imposed by National Assessing Authority is not in accordance with the violation.
- The administrative penalty levied surpasses the limited prescribed hereunder.
You should know : Relevant Activities under Economic Substance Regulations
Procedure for how to Apply for ESR Appeal Request
First of all, it should be kept in view that the submission of ESR appeal by the Licensees or Exempted Licensees is to be done electronically through the Ministry of Finance Portal. For which you have to visit the Ministry of Finance website on which you have to log in to your account after which the Licensee’s dashboard (Home) will appear. The next step after that would be to submit ESR appeal request. However, it must be understood that the submission of ESR appeal is to be made separately for each administrative penalty. For submission of ESR appeal request, Click on “File Appeal”.
The Ministry of Finance system shows that the deadline for the submission of ESR appeal request is forty working days starting from the date on which the administrative penalty is imposed. The deadline for the payment of penalty is forty working days starting from the date on which the administrative penalty is imposed. However, the calculation of the final deadline for the payment of such administrative penalty is discontinued upon submitting the ESR appeal request, and it will continue if the ESR appeal request is rejected or withdrawn.
On the Economic Substance Regulations Appeal Request page, the Licensees or Exempted Licensees to clarify the reason for the submission of ESR appeal request must add a simplified explanation as well as attach all the supporting documents mentioned under Economic Substance Requirements to the ESR appeal request. The Licensees or Exempted Licensees can submit up to ten supporting documents, but the total size of those documents must not be more than forty megabytes. After this you can press “Next”.
By fulfilling all the necessary Economic Substance Requirements, send the ESR appeal request after reviewing the simplified explanation and the attached supporting documents by pressing “Send”. After sending the ESR appeal request, you will receive a message “your submission has been received”. The ESR appeal’s status changes from “No Appeal Submitted” to “Appeal Submitted”. After the submission of ESR appeal the National Assessing Authority makes a decision within forty working days starting from the date of submitting all the required information and then inform the Licensees or Exempted Licensees with their decision within five working days starting from the date when the decision was issued.
The following information must be provided for follow-up:
- The name of the Licensees or Exempted Licensees
- The respective Regulatory Authority
- Case ID
The appeal Case ID can be seen when you click “View Summary”.
Read more about : Understanding Economic Substance Regulations in UAE
Durations and Functions of ESR Appeal
- The time frame for the submission of ESR appeal is forty working days starting from the imposed date of the administrative penalty.
- The time frame for the issuance of decision of the ESR appeal is forty working days starting from the date of submitting all the Economic Substance Requirements.
- The time frame for informing the Licensees or Exempted Licensees about the decision is five working days staring from the date of issuance of the decision by National Assessing Authority.
- The time frame for the document request by National Assessing Authority is five working days staring from the date of date of requesting documents.
- The time frame for the final period to pay the penalty is forty working days starting from the date when the administrative penalty is imposed.
If the submission of supporting documents by the Licensees or Exempted Licensees requires more than five working days, the National Assessing Authority must be notified by submitting the appeal request, in which they need to state the reason for their delay and the time required to provide the supporting documents. The National Assessing Authority has the ultimate right to accept or reject the ESR appeal request if the supporting documents are not provided within the given timeframe. Contact Economic Substance Regulations to submit your ESR Appeal Request.
Bola Olaoye is a Legal Senior Associate and holds an LLB from Adekunle Ajasin University as well as a Bar Certificate from the Council of Legal Education. With experience spanning 14 years, she knows the ins and outs of UAE’s laws and practices and has helped provide clear and concise guidance to clients on the appropriate law-abiding measures to be taken concerning Economic Substance Regulations (ESR).