Entities are subjected to penalties in the following cases:
• When they fail to submit the Annual Notification
• When they fail to submit the Economic Substance Report
• When they provide incomplete or inaccurate information in any of the submitted reports
• When they fail to prove enough economic substance for the specific financial year in the country
In all of the above cases, the relevant authorities in UAE impose fines on entities.
In the case of inaccurate or incomplete information, the fine amount is AED50,000.0 for both notification and report. In the case of delay in submission, the penalty amount is AED20,000.0 and AED50,000.0 respectively for ESR Notification and ESR Reporting. In the case of failure to submit, the entities are penalized with an administrative penalty of AED20,000.0.