The UAE Ministry of Finance Issues Decision on Limiting Duration of Economic Substance Requirements

The Ministry of Finance Issues Decision on Limiting Duration of Economic Substance Requirements

The UAE Ministry of Finance (MoF) has issued Cabinet Decision 98 of 2024 limiting the application period of the Economic Substance Regulations. According to the decision, these requirements will only apply from 1 January 2019, to 31 December 2022. Furthermore, any penalties imposed for financial years after 31 December 2022, must be reviewed by the Federal Tax Authority, with the possibility of repayment.

This decision amends Cabinet Resolution No 57 of 2020, dated 10 August 2020, which pertains to the economic substance requirements. You can read more here: MoF Announcement.

The requirement to demonstrate adequate economic substance has not been entirely eliminated. It remains a key condition for businesses seeking to benefit from the Qualifying Free Zone Person tax regime.