ESR Appeal to FTA UAE against the decision of Administrative Penalties

Sometimes with the decision on ESR administrative penalties, the Licensee may disagree and seek to appeal against such decision. The Federal Tax Authorities of UAE issued an ESR Appeal user guide to guide the Licensees on furnishing ESR appeals.

Here, we will discuss an ESR appeal, to whom it is to be submitted, the circumstances where an appeal can be filed, how it is to be filed, its timelines, etc. So, let us start!

What is an ESR Appeal?

As per Article 17 of the Cabinet of Ministers Resolution No. 57 of 2020, a Licensee (including an Exempted Licensee) has a right to appeal against the decision imposing an administrative penalty on such Licensee. An ESR appeal can be filed only on the following grounds:

The Licensee did not commit the alleged violation towards which the administrative penalty has been imposed,
The administrative penalty imposed is not proportionate to the violation committed,
The administrative penalty imposed on the Licensee exceeds the prescribed penalty threshold.

To whom an ESR Appeal is to be filed?

An ESR Appeal against the administrative penalty is to be filed with the Federal Tax Authority (National Assessment Authority (“NAA”).

How to file an ESR Appeal?

An ESR Appeal request is to be submitted through the Ministry of Finance Portal https://www.mof.gov.ae/en/strategicpartnerships/pages/esr.aspx, using the Ministry of Finance’s Corporate Account.

Navigate to the Licensee’s Dashboard, where an appeal will be filed for each administrative penalty separately.

Under Submittals >> Click on “File Appeal.”

An Appeal Request page will pop up. Add the reason for filing an appeal and attach the relevant documents.

A maximum of 10 documents can be attached, with a combined size of 40 MB.

After adding the explanation text and attaching the documents >> Click on “Next” >> Review the application and click on “Send”.

A unique Case ID would be generated upon submission, which can be used for later reference.

With this, the appeal status is updated from “No Appeal Submitted” to “Appeal Submitted”.

How to furnish additional documents requested by NAA, UAE?

If NAA requests any additional details, the status of the appeal application changes from “Appeal Submitted” to “Resubmit”.

Under Submittals >> Click on “Resubmit.”

An Appeal Supplement page will pop up. Read and understand the reason for additional details. Add the response and attach the requested documents.

A maximum of 10 documents can be attached, with a combined size of 40 MB.

After adding the explanation text and attaching the documents >> Click on “Next” >> Review the application and click on “Send”.

For any request from NAA to submit additional information or documents, the Licensee needs to respond to such request within five (5) working days from the date of such request made by NAA.

NAA has the right to reject the appeal if the additional details are not furnished within the given timeframe.

How to follow up on an ESR Appeal filed?

To follow up on an ESR Appeal filed with National Assessment Authority, an email is to be sent to FTAESR@tax.gov.ae with the below-mentioned details:

Name of the Licensee,
The name of the relevant Regulatory Authority,
Unique Case ID generated at the time of submitting an ESR Appeal.

What are the ESR violations and corresponding administrative penalties?

Resolution No. 57 of 2020	Violation	Penalty amount (in AED)	Timeframe to levy penalty
Article (13)	Licensee’s failure to submit ESR notification (including relevant information or documents) within six (6) months from the end of the financial year	20,000	Six (6) years from the date of commitment of violation
Article (14)	Licensee’s failure to submit Economic Substance Report (including relevant information or documents) within twelve (12) months from the end of the financial year	50,000	Six (6) years from the date of commitment of violation
	Failure to meet Economic Substance Test
	Submitted ESR Report within time, but the furnished report does not meet UAE ESR requirements
	Repeated any of the above violations related to ESR Report submission in the immediately following financial year	400,000 + Suspension/ withdrawal/ non-renewal of trade license	Six (6) years from the date of commitment of violation
Article 15	Knowingly furnishing inaccurate information about ESR or non-intimating the authorities about the inaccuracy upon learning about the same	50,000	Twelve (12) months from the date when the National Assessment Authority became aware of the same

What are the timelines of an ESR Appeal?

Activity status	Timelines
Submission of an ESR appeal by Licensee	Forty (40) working days from the date of imposition of the penalty
Issuance of appeal decision by the National Assessment Authority	Forty (40) working days from the date when all appeal and related documents requirements are met
Intimation of the appeal decision to Licensee	Five (5) working days from the date of issuance of the appeal decision by the National Assessment Authority
The request for additional documents by the National Assessment Authority	Five (5) working days from the date of request made for additional documents
Period to pay the administrative penalty	Forty (40) working days from the date of imposition of the administrative penalty

Conclusion

If you find it challenging to understand the process of filing an appeal or seek further advice, UAE ESR is the place to be. UAE ESR provides consultancy services and ESR compliance support to clients in the UAE.

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