The Ministry of Finance has announced updates in relation to certain provisions of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.

One of these amendments includes the introduction of a Domestic Minimum Top-up Tax (DMTT).

Following the issuance of Federal Decree Law No. 60 of 2023, a DMTT will be effective in the UAE for financial years starting on or after 1 January 2025. This strategic step reflects the UAE’s commitment to implementing the Organisation for Economic Co-operation and Development’s (OECD) Two-Pillar Solution, aimed at establishing a fair and transparent tax system aligned with global standards.
The Pillar Two rules require large multinational enterprises (MNEs) to pay a minimum effective tax rate of 15% on profits in every country where they operate.
The DMTT will apply to multinational enterprises operating in the UAE with consolidated global revenues of €750 million (approximately Dh3.15 billion) or more in at least two out of the four financial years immediately preceding the financial year in which the DMTT applies. The UAE’s implementation of the DMTT will closely align with the OECD’s Globe Model Rules.

This amendment aims to enhance the business environment in the UAE and promote greater compliance with global standards for tax transparency and fairness.

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