Economic substance
Log the evidence that your business really operates from the UAE, with its people, premises, spending and decisions, and keep the supporting documents with each entry.
Economic substance is the evidence that your company's business is really carried on in the UAE: the people who work for it here, its office, what it spends here and where its decisions are taken. The Economic Substance screen is a log of that evidence. Each entry records one activity, such as a board meeting, a rent payment or a hire, with its date, its value and the document that proves it.
The log is your own record. It does not post anything to your books, does not change your corporate tax return and is not sent to any authority.
The log#
Open International › Economic Substance.
- 1 Log Activity adds an entry. 2 Print record opens a printable record of the financial year in a new window: the overall score, each category with its activities, those in the UAE and their amount, and the kind of records usually kept as evidence for it. Allow pop-ups for Verasol if your browser blocks it.
- A box at the top says what the page is for: whether economic substance notifications or reports are needed for a financial year depends on the rules that apply to that year, which your tax adviser can confirm.
- 3 Substance record score: for the financial year (the same period as your corporate tax return), the overall score and, per category, the number of activities in the UAE and its points out of 100. See the substance score below.
- 4 Relevant Activities: the nine relevant activities of Cabinet Decision No. 57 of 2020 (Article 3), such as banking, insurance, fund management, headquarters, holding company, intellectual property and distribution and service centre. Switch on the ones your company carries out; the choice is saved at once and is the same list as in the module's settings.
- Filter the log by Category, Period (This financial year, This Month, Last Month, This Quarter or All dates) and Where (In the UAE or Outside the UAE).
- 5 Substance Activities Log lists the entries, the latest first: Date, Category, Activity, Details, Value (AED) and 6 Evidence: Yes when a supporting document is attached.
- The eye shows the entry, with its supporting document to download. The pencil edits it; a file you choose then replaces the attached one. The bin deletes the entry, after you confirm, and its supporting document with it.
Log an activity#
- Click Log Activity.
- Choose the Substance Category: Office & Premises, Employees, Strategic Decisions, Operating Expenditure, Assets or Core Income Generating Activities.
- Choose the Activity Type, for example an office lease payment, a salary payment, an employee hired, a board meeting, a strategic decision, a vendor payment, an asset purchase or a service delivered.
- Check the Activity Date and choose the Emirate.
- Give the Activity Title, and a Description if useful.
- Enter the Amount (AED) when the activity has a value, such as rent or salaries, and the Location.
- Attach the evidence in Supporting Document: contracts, minutes, invoices or other proof.
- Add Notes if useful. Leave This activity was conducted in the UAE ticked when it took place in the UAE, and click Log Activity.
1 Substance Category, 2 Activity Type, 3 Activity Title, 4 Supporting Document, 5 This activity was conducted in the UAE.
The substance score#
The score counts, for each of the six categories, the activities of the financial year that took place in the UAE: none scores 0, one or two 30, three to five 60, and six or more 100. The overall score is the average of the six. The same score is shown as the Economic Substance Score on the International dashboard, where View details brings you back to this screen.