Click here to see newly released Guidance
On 30th April 2019 the United Arab Emirates (UAE) issued the Cabinet of Ministers Resolution No. 31 of 2019 concerning economic substance regulations in the UAE (the “New Law”).
The New Law creates the basis for the UAE to meet the requirements of the European Union Code of Conduct Group (Business Taxation) (COCG) in respect of economic substance, and specially to ensure that the jurisdiction does “not facilitate structures or arrangements aimed at attracting profits which do not reflect real economic activity in the jurisdiction” and “avoids that profits registered in a jurisdiction are not commensurate with economic activities and substantial economic presence”. The introduction of the New Law follows the decision of the European Union (EU) to include the UAE on a list of non-cooperative jurisdictions for tax purposes.
The UAE has been firmly committed to its long-standing policy of meeting the highest international standards on taxation,
including the OECD’s requirements. The introduction of the New Law is a strong sign that the country is keen to continuously update its domestic legislative framework in this regard.