As the government looks to increase non-oil revenue, the UAE’s finance minister announced Monday that it will begin imposing a minimum top-up tax of 15% on large multinational corporations operating in the country in January.
The UAE Ministry of Finance has announced updates about specific aspects of Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses.
The UAE will implement a Domestic Minimum Top-up Tax (DMTT) for fiscal years beginning on or after January 1, 2025, subsequent to the adoption of Federal Decree Law No. 60 of 2023. This calculated move demonstrates the UAE’s dedication to putting the Organization for Economic Co-operation and Development’s (OECD) Two-Pillar Solution into practice, which aims to create an equitable and open tax system that complies with international norms.
According to the Pillar Two regulations, large multinational corporations (MNEs) must pay a minimum effective tax rate of 15% on their profits in each of the countries in which they conduct business.
Multinational corporations doing business in the United Arab Emirates that generated a combined worldwide sales of €750 million or more in at least two of the four fiscal years prior to the fiscal year will be subject to the DMTT.
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