The Guidance on Appeal Filing ESR assists Licensees or Exempted Licensees in submitting an appeal request to the Federal Tax Authority (FTA) related to imposing Administrative Penalties concerning Economic Substance Regulations (ESR).
Under Cabinet Resolution 57 of 2020, the Federal Tax Authority is defined as the National Assessing Authority and is responsible for handling and deciding on appeal requests concerning ESR. The Guidance on Appeal Filing ESR aims to assist individuals in submitting ESR appeal requests against the decisions of administrative penalties levied on Licensees or Exempted Licensees.
To propose an appeal to the National Assessing Authority, the Licensees or Exempted Licensees may submit an appeal filing concerning Economic Substance Regulation for any of the following reasons:
- The Licensee or the Exempted Licensee did not commit the violation attributed to them.
- The administrative penalty imposed by National Assessing Authority is not per the violation.
- The fine imposed exceeds the limit specified hereunder.
Along with submitting the Appeal filling concerning the ESR request, this Guidance also helps the Licensees with below other services:
- Support in submitting an Appeal case
- Assists the Licensees in providing supporting documents in different ways & methods.
- Demonstrates points to be taken care of when submitting the Appeal Filing concerning Economic Substance Regulations.
- Gives the List of penalties under the Cabinet Resolution No 57 of 2020
- The time frame for the appeal Filing concerning Economic Substance Regulations request.
Guideline for how to Apply Appeal Request for Economic Substance Regulation
- Submit the request for the Appeal filling concerning Economic substance Regulation online. The online Appeal request is done through the Ministry of Finance Portal.
- The Licensee or the Exempted Licensee must add a clear explanation for the request along with all the supporting documents mentioned under Economic Substance Requirements to clarify the reason for the appeal filing concerning ESR.
- After all the necessary Economic Substance Requirements fulfillments, send the ESR appeal request after evaluating the simplified explanation and the supporting documents. Once the plea is submitted, the status changes from “No Appeal Submitted” to “Appeal Submitted”;
- After submitting the Appeal Filing concerning Economic Substance Regulations, the Ministry will send an Acknowledgment email.
- When the National Assessing Authority receives the appeal request, they make a suitable decision within forty working days from the day of appeal submission and notify the Licensees or Exempted Licensees of their decision within five working days from the day of issuing the decision.
Also, the Licensee or Exempted Licensee must provide the following information for follow-up:
- Case ID
- The individual Regulatory Authority
- Licensees or Exempted Licensees’ name
- According to the Ministry of Finance, the deadline for appeal Filing concerning ESR request submission is forty working days from the imposing date of administrative penalty, and the deadline for the payment of the fine is also forty working days starting from the date of imposing the administrative penalty. However, the final deadline calculation for settling the administrative penalty is discontinuing on submitting the appeal request, and it will continue if the rejection request or withdrawn.
- If the Licensee needs more than five days to submit the supporting documents, they must notify the National Assessing Authority and state the reason for the delay.
- The National Assessing Authority has the utmost right to accept or reject the appeal request concerning Economic Substance Regulations if there is a delay in submitting the supporting documents within the given timeframe.
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