The United Arab Emirates will impose a 15 per cent Domestic Minimum Top-up Tax (DMTT) on large multinational corporations starting January, as per the Ministry of Finance announcement. This step aligns with the OECD’s global tax framework, supported by 136 countries, including the UAE, to ensure major corporations pay at least 15 per cent in taxes and reduce tax avoidance.
The DMTT will apply to companies with consolidated global revenues of $793.50 million or more in at least two of the previous four financial years. This follows the UAE’s introduction of a 9 per cent corporate tax last year, which exempts free zones that drive much of the country’s economy.
The tax forms part of the OECD’s Two-Pillar Solution, which ensures multinational enterprises pay a minimum tax rate on profits in each jurisdiction where they operate.
Additionally, the UAE’s Ministry of Finance is considering new corporate tax incentives, including a refundable tax credit for research and development (R&D), offering 30-50 per cent depending on company size and operations, applicable from 2026. A tax credit for high-value employment activities, based on eligible employee costs, is also under review and could take effect as early as January 2025.
These proposed measures remain subject to legislative approval.
