ESR Amendment on Exempted Licensee

CABINET OF MINISTERS RESOLUTION No. 57 of 2020
CONCERNING ECONOMIC SUBSTANCE REQUIREMENTS

Article-1 along with various definitions, defined LICENSEE AND EXEMPTED LICENSEE as follows: 

License: the trade license or permit issued by the relevant competent licensing authority of the State, including a Free Zone or a Financial Free Zone. 

Licensee: Means any of the following two entities:
(a) a juridical person (incorporated inside or outside the State); or
(b) a Unincorporated Partnership*; registered in the State, including a Free Zone and a Financial Free Zone and carries on a Relevant Activity. 

Exempted Licensee: means any of the following:

(a) a Licensee that is an Investment Fund; 

(b) a Licensee that is a tax resident in a jurisdiction other than the State; 

(c) a Licensee that is wholly owned by one or more residents in the State and meets the following two conditions : 

(1) it is not part of an MNE Group**; and 

(2) it only carries out business in the State. 

(d) a Licensee that is a branch of a foreign entity the Relevant Income of which is subject to tax in a jurisdiction other than the State; and 

(e) any other Licensee as determined pursuant to a decision of the Minister of Finance. 

* Unincorporated Partnership:
(a) limited partnership (which is not a juridical person); or 

(b) general partnership that is registered in the State, including in a Free Zone or a Financial Free Zone 

** MNE Group: means any Group that includes 

  1. (i) two or more entities the tax residence of which is in different jurisdictions or; 
  2. (ii) an entity that is resident for tax purposes in one jurisdiction and is subject to tax, with respect to the activities carried out through a branch or permanent establishment, in another jurisdiction. 

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