UAE ESR Update: Historic Obligations & 2026 Checks
ESR reporting was cancelled for financial years ending after 31 December 2022. Understand historic obligations and separate Corporate Tax substance rules.
The current position
The Ministry of Finance announced that Economic Substance Regulations notification and reporting requirements were cancelled for financial years ending after 31 December 2022. A business should not be told it must submit a new annual ESR report simply because it operates in a UAE free zone in 2026.
Historic obligations still matter
The amendment does not remove obligations for earlier financial years. Outstanding filings, penalties and requests for information concerning those years require a separate review. Identify the financial year in question before applying an old filing checklist.
| Financial year concerned | Planning position |
|---|---|
| Ending on or before 31 December 2022 | Review applicable historic ESR obligations and outstanding authority matters |
| Ending after 31 December 2022 | ESR notification and reporting requirements cancelled under the amendment |
Corporate Tax substance is a separate question
Cancellation of ESR reporting does not abolish company, beneficial-owner, accounting or Corporate Tax obligations. Qualifying Free Zone Person treatment has its own requirements, including adequate substance and other statutory conditions. Do not confuse an ESR filing with proof of eligibility for a 0% qualifying-income rate.
Under the standard UAE Corporate Tax regime, taxable income above AED 375,000 is subject to 9% tax. QFZP treatment is conditional and requires an activity-specific tax assessment.
A practical review checklist
- Identify the historic financial years and any outstanding authority requests.
- Preserve supporting records and obtain qualified advice on unresolved filings or penalties.
- Review current Corporate Tax registration, reporting and substance requirements separately.
- Confirm statutory records, ownership information and ongoing company filings.
Official source and review date
Reviewed 20 October 2026 against the Ministry of Finance announcement on the ESR amendment. See the UAE Corporate Tax guide for the separate tax framework.
Two Pillars Advisory is an independent consultancy, not a government entity. This information is not a legal or tax opinion. Discuss the obligations for your company.
Review and authoritative references
Last reviewed: . Regulatory content and presentation review.
Official references explain the applicable framework; they do not validate every estimate below. Authority fees, bank tariffs and eligibility can change. Confirm the current requirements before committing funds.