In the wake of the publication of the updated Cabinet Resolution Nr. No. 57 of 2020 regarding ESR Consultants in Dubai on August 10, 2020.
The functions of the FTA include not limiting itself to undertaking assessments to determine if a licensee meets an Economic Substance Test, imposing administrative penalties when necessary and listening to the decision of appeals. The FTA has recently started audits of UAE businesses to determine their compliance with ESR Consultants in Dubai regulations.
There are several actions that relevant Licensees should be taking to ensure compliance, ranging from clarifying their entity classifications to the design of delegation and contractual arrangements, reviewing and arranging for their governance structure structures, their arrangements for employment and premises and the recording of pertinent business data that is required to be filed and prepared of reports for the Regulatory Authority.
What is the process by which FTA informs the public about the Audit?
The FTA informs the Licensees selected about the Audit by email. It also provides the first list of documents needed for audits.
What is the deadline for supplying the information requested?
In the ESR audit procedure A five-day timeframe is generally set to provide all required details, which presents a problem for Licensees because of the short period.
Licensees who fail to cooperate with FTA throughout the process of Audit or cannot supply the requested documents and data within the specified deadlines are punished.
What information is required?
Therefore, the required documents for the Audit will depend upon the relevant activity reported in ESR submissions.
However, regardless of the relevant activity, FTA requests some standard list of information in its audit procedure. The information requested is intended to examine operations and financial, tax, transfers pricing and legal and governance issues, which include but not only:
- An in-depth explanation of the nature of the transactions, operations, and additional documents.
- Working papers to calculate the financial figures presented within the ES report.
- Evidence that directors who were not residents of the UAE that comprised the quorum were present in the UAE at Board meetings.
- CVs of employees who are full-time or outsourcing agreements if the relevant activity is outsourced
- Timesheets/biometric logs for full-time employees
What can you do to prepare?
Because the requests submit by FTA are lengthy and have an arduous deadline of just five jours, the following steps must take for every UAE Licensees:
- Examining the Licensees’ actual situation concerning the provisions of the new ESR;
- Identifying the current obligations relating to an economic substance that apply to the Licensee and preserving documents supporting the same;
- We are informing the public of precise information in annual notices and reports backed with supporting documents.
- Financial figures should be provided following the finalized work documents, preferring financial statements that have been audit. If they are not available, the provisional financial statements could suffice.
- The appointment of directors physically in the UAE for board meetings and strategic decisions.
HOW CAN WE HELP?
We strongly suggest that all UAE companies that fall under the ESR’s scope of ESR examine their governance structure and implement the measures necessary to comply with ESR standards. Any non-compliant practices must address.
Our team will help you understand all ESR requirements and to ensure complete compliance. Our ESR assessment/diagnostic analysis helps you understand the requirements for compliance. So that apply to your business and the weaknesses that have been discover. In the event of an ESR audit, our team will assist with understanding the technical requirements in the data sought by FTA and help you navigate the process of Audit.
WHO ARE WE?
Re-think is an outsourcing and advisory firm that provides client-focused services in accounting, tax advisory, human resources, and business advice.
We focus on providing our clients with high-quality, cost-effective solutions and services. So we add value by investing in competent and enthusiastic employees and collaborating with top business partners. We provide customers with one-stop shopping. So for all of their business support requirements that are customize to meet each client’s specific requirements.