April 30 2019, the United Arab Emirates (UAE) Cabinet issued the Cabinet of Ministers Resolution No.31 of 2019 (concerning economic substance regulations in the UAE, “the Regulations”). The introduction of the Regulations requires relevant UAE entities that perform certain business activities to be able to demonstrate economic substance in the UAE from April 30 2019.
WHY HAVE THESE REGULATIONS BEEN INTRODUCED?
The launch of the Regulations follows the outcome of the European Union (EU) including the UAE on a list of non-cooperative jurisdictions for tax purposes (EU Blacklist). In addition, the Regulations demonstrates the continuous efforts of the UAE to fulfil all EU requirements and the highest international standards on taxation including the Organisation for Economic Co-operation and Development (OECD) conditions.