How to Check Your Own Position
Because older articles still describe ESR as a current yearly filing, it is worth checking your own position step by step instead of relying on a headline. The steps below are a practical starting point, not tax advice.
1. Identify the financial years that matter
List the financial years in which your company existed. ESR applied to financial years that began before 1 January 2023, and it no longer applies to years that start on or after that date. If your company only started after 2022, ESR will not have applied to it for any year.
2. Keep records for the earlier period
If your company existed in 2019 to 2022 and carried out a relevant activity, keep copies of any notifications and reports it filed, along with proof of submission. Confirm with the Ministry of Finance or a qualified adviser whether anything for those years remains open, rather than assuming either way.
3. Look at the substance test that applies now
Free zone companies that want to be treated as Qualifying Free Zone Persons for corporate tax need adequate substance in the UAE. In general this means performing the core income-generating activities in the UAE, with suitable assets, qualified employees and operating expenditure for the business. This test sits in the corporate tax regime and is separate from the old ESR filing. The free zone corporate tax guide explains the conditions in more detail.
4. Spot outdated advice
Be careful with any page, proposal or quote that says a yearly ESR notification or report is due for a recent year, or that quotes fixed ESR fines for current periods. Ask the provider which law and which financial year they are referring to, and check it against the official sources listed on this page.
5. Keep the paper trail anyway
Whatever the rules say today, banks, free zones and auditors may still ask where your management sits, who does the work and where the premises are. A lease, payroll records and board minutes held in the UAE are useful evidence for several purposes.
UAE Economic Substance Regulations (ESR): What Still Applies
Cabinet Decision No. (98) of 2024 removed the ESR requirements for financial years starting on or after 1 January 2023. This guide explains what that means for your company, what remains relevant for earlier years, and where substance still matters.
Ask About Your ESR PositionWhere ESR Stands Today
The UAE introduced Economic Substance Regulations (ESR) in 2019 in response to international tax transparency standards. Companies carrying on certain "relevant activities" had to file an annual notification and, where they earned income from those activities, an ESR report showing adequate substance in the UAE.
That requirement has now been removed for current years. Under Cabinet Decision No. (98) of 2024, which amends Cabinet Decision No. (57) of 2020, ESR no longer applies to financial years starting on or after 1 January 2023. Older articles, including earlier versions of this page, that describe ESR as a live annual filing are out of date.
Current years
No ESR notification or report for financial years starting on or after 1 January 2023.
2019 to 2022
These periods were covered by ESR. Outstanding filings for them should be reviewed with an adviser.
Corporate tax
Free zone companies seeking the 0% rate still need to meet substance conditions under the corporate tax law.
Other regimes
UBO records and corporate tax registration are separate and continue to apply.
What ESR Covered
For the 2019 to 2022 periods, a UAE entity carrying on one of the following relevant activities had to consider ESR obligations:
- Banking
- Insurance
- Investment fund management
- Lease-finance
- Headquarters
- Shipping
- Holding company
- Intellectual property
- Distribution and service centre
An entity with relevant activity income had to show that it was directed and managed in the UAE, carried out its core income-generating activities in the UAE, and had adequate people, premises and expenditure there. Entities in this category filed a notification and, where required, a report for each period. Penalties for failing to file applied under the rules in force at that time.
What This Means for Your Company
| Situation | Position |
|---|---|
| Mainland, free zone or offshore company, financial year starting on or after 1 January 2023 | No ESR notification or report is required for that year. |
| Company with relevant activity income in 2019 to 2022 | ESR rules applied to those years. Confirm with an adviser that any due filings were made. |
| Free zone company that wants the 0% corporate tax rate | Must meet the Qualifying Free Zone Person conditions, which include maintaining adequate substance in the UAE. This is a corporate tax test. |
| Any UAE company | Corporate tax registration and UBO record-keeping apply separately from ESR. |
Offshore, mainland and free zone structures are treated differently under corporate tax, so a company's own facts decide the outcome. Ask a licensed adviser to review yours.
ESR Questions Answered
Do UAE companies still have to file ESR notifications and reports?
Not for financial years starting on or after 1 January 2023. Cabinet Decision No. (98) of 2024, which amends Cabinet Decision No. (57) of 2020, removed the ESR requirements from that date. The requirements for 2019 to 2022 are a separate matter.
Does ESR still matter for the 2019 to 2022 financial years?
Those years were covered by the ESR rules at the time. If your company carried on a relevant activity in those years and a notification or report was due but not filed, review the position with a qualified tax adviser rather than assuming it has lapsed.
Is my free zone company affected by substance rules under corporate tax?
Possibly. A free zone company that wants to be treated as a Qualifying Free Zone Person for the 0% corporate tax rate must meet the conditions in the corporate tax law, which include maintaining adequate substance in the UAE. This is a corporate tax test, not an ESR filing.
Do UBO filings and corporate tax registration still apply?
Yes. The removal of ESR does not change beneficial ownership requirements or corporate tax registration. These are separate regimes with their own rules.
Where can I check the current position myself?
The UAE Ministry of Finance (mof.gov.ae) and the Federal Tax Authority (tax.gov.ae) publish official guidance. Rules change, so confirm the current position with them or a licensed adviser before acting.
Official Sources
Check rules directly with the authorities before acting on any general guide:
- UAE Ministry of Finance, issuer of the ESR and amending Cabinet decisions
- Federal Tax Authority, corporate tax registration, guidance and filing
This page is general information, not tax or legal advice.
Related guides
Not Sure How ESR or Substance Applies to You?
Tell us about your company and we can discuss your position, including earlier ESR periods and corporate tax substance. A licensed tax adviser should confirm any filing decisions.
Tell Us About Your Company
What We Can Help With:
Position Review
Where your company stands today
Past-Period Check
Whether earlier filings need attention
Document List
What to gather for an adviser
Next Steps
Based on your company's facts
Substance Review
For free zone corporate tax
Referral if Needed
To a licensed adviser where required