ESR in 2026: the current position
Here is the short version most guides bury: there are no ESR filings to make in 2026. Cabinet Decision No. 98 of 2024 abolished the ESR notification and report for financial years ending after 31 December 2022. But "abolished" is not the same as "irrelevant" — your pre-2023 history, your records, and the underlying idea of substance still matter. This guide gives you the current position, honestly.
The essentials
ESR was introduced in 2019, and then largely switched off. Here is what is true now.
Cabinet Decision No. 98 of 2024 repealed the old ESR regulation (Cabinet Decision No. 57 of 2020). The annual ESR notification and the substance report are gone for financial years ending after 31 December 2022 — so nothing is due for 2023, 2024, 2025 or 2026.
Anti–"paper company" rules. Entities conducting a Relevant Activity — banking, insurance, IP, headquarters, shipping, holding, fund management, lease-finance, distribution & service centre — had to show real UAE management, staff, spending and premises, and file to prove it.
The repeal is not retroactive forgiveness. If your entity missed a notification or report for 2019–2022, that exposure did not evaporate — the historical penalties for those years can still apply.
Keep every pre-2023 ESR submission, plus the evidence behind it, for at least five years — longer if your adviser says so. An authority enquiry about 2021 arrives long after memories fade.
The paperwork is gone; the concept lives on. Corporate tax (Qualifying Free Zone Person conditions), transfer pricing and free-zone substance expectations all still test whether your UAE presence is real.
Alignment with the corporate-tax era. With a 9% federal tax and its own anti-avoidance machinery in place, a parallel substance-filing regime became redundant for later years.
We prepare workings, schedules and compliance-ready records. For regulated representation before the FTA we work with registered UAE tax partners.
The process
Watch out
The regime changed — the mistakes just moved.
The filing is gone; the concept moved house. Corporate-tax residence rules, Qualifying Free Zone Person conditions and transfer-pricing documentation all still ask the same underlying question: is your UAE presence real?
Companies "tidy up" and shred pre-2023 files — then an authority asks about 2021. Keep every old ESR submission and its evidence for at least five years. Storage is cheap; reconstruction is not.
"It was years ago" is not a compliance position. A missed notification or report from the old regime still carries its penalty exposure. Document the gap, quantify it, and get advice on remediation.
Some providers still sell annual "ESR filing services" for 2024, 2025, 2026. There is nothing to file for financial years ending after 31 December 2022. If someone invoices you for it, ask exactly which filing they mean.
Worked example
Meridian Holdings Ltd is incorporated offshore in the UAE. In 2021 it held shares in one operating subsidiary — that was Holding Company Business, a Relevant Activity under the old regime. It has no employees beyond its registered agent, and its directors live abroad. Nobody filed anything for 2021: no notification, no report.
No. Cabinet Decision No. 98 of 2024 abolished filings for financial years ending after 31 December 2022. The 2021 obligations stand exactly as they were: a notification was due, and because a Relevant Activity was conducted, a substance report was due too.
Under the old penalty framework, a missed notification historically carried AED 20,000 and a missed report AED 50,000 — so the theoretical exposure for 2021 is up to AED 70,000, before considering whether the entity would even have passed the substance test. (Confirm current enforcement practice with a qualified adviser; figures describe the old regime's framework.)
Document the position honestly: what the entity did in 2021, what was filed (nothing), and why. Assemble whatever 2021 evidence still exists — minutes, bank statements, agent correspondence. Then take professional advice on voluntary disclosure versus monitored remediation. What you must not do is backdate documents or invent a filing that never happened — that converts an administrative exposure into something far worse.
The trap to avoid: assuming the 2024 abolition wiped the slate. It wiped the future filing obligation, not the past one. The years 2019–2022 are still examinable.
ESR FAQs
No. Cabinet Decision No. 98 of 2024 abolished the ESR notification and substance report for financial years ending after 31 December 2022, so there is nothing to file for 2023 onward — including 2026.
The annual ESR notification and the ESR substance report required under Cabinet Decision No. 57 of 2020. The repeal was published in the Official Gazette on 16 September 2024 and applies to financial years ending after 31 December 2022.
No. The abolition is not retroactive. Obligations for financial years 2019–2022 stand as they were, and the historical penalties for those years can still apply. Document the gap and take professional advice on remediation.
Keep every pre-2023 ESR submission and the evidence behind it for at least five years — longer if your adviser recommends it. Authorities can still ask about those years.
No. The concept moved into other regimes: corporate-tax residence and Qualifying Free Zone Person conditions, transfer-pricing documentation for related-party transactions, and free-zone substance expectations all still test whether your UAE presence is real.
Small Business Relief switches off your corporate-tax bill for eligible periods; it never switched off ESR duties, and now there are no ESR duties to switch off for post-2022 years. The two regimes were always separate — check our corporate-tax guide for how they sit together.
Keep going
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