Key takeaways
- The UAE Domestic Minimum Top-up Tax (DMTT) is a separate tax that tops up the tax paid by UAE entities of large multinational groups towards a 15% minimum effective rate, for fiscal years starting on or after 1 January 2025.
- The UAE Domestic Minimum Top-up Tax applies only to groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding fiscal years; a typical UAE SME with AED 5m to 50m revenue is outside it.
- A group that operates only inside the UAE is outside the UAE Domestic Minimum Top-up Tax however large its revenue, according to the Federal Tax Authority's October 2026 scope guide.
- The UAE Domestic Minimum Top-up Tax sits alongside the 9% corporate tax and the 0% Qualifying Free Zone Person rate; it does not replace them, and an in-scope entity must register even when the amount payable is zero.
- In-scope entities whose first in-scope fiscal year ended before 30 April 2026 are reported to face a registration deadline of 30 November 2026; confirm the date in the FTA's own decision and guide.
- The UAE has chosen not to apply the Income Inclusion Rule for now, because its corporate tax regime has no controlled foreign company rules, so the UAE Domestic Minimum Top-up Tax is how the UAE keeps top-up revenue on UAE profits.
What is the UAE domestic minimum top-up tax?
The UAE Domestic Minimum Top-up Tax is a tax on the UAE entities of very large multinational groups, charged where those entities' effective tax rate falls below 15%. It is imposed by Cabinet Decision No. 142 of 2024 on Top-up Tax and follows the Ministry of Finance's December 2024 announcement under Federal Decree-Law No. 60 of 2023, which amended the corporate tax law.
The Ministry of Finance says it is modelled on the OECD's GloBE Model Rules, the Pillar Two global minimum tax. The point of a domestic version is to keep the revenue in the UAE: if the UAE collects the top-up on low-taxed UAE profits, other countries have no reason to collect it instead. The OECD placed the UAE rules on its Central Record of Legislation with Transitional Qualified Status, which the Ministry of Finance announced on 25 August 2025.
Who has to pay the top-up tax?
Only UAE-located entities of a multinational group with consolidated revenue of EUR 750 million or more in at least two of the four preceding fiscal years are in scope. The revenue test is measured in the ultimate parent entity's consolidated financial statements, so a UAE subsidiary's own turnover is not the test.
| Item | Rule | Source |
|---|---|---|
| Revenue test | EUR 750 million or more in at least two of the four preceding fiscal years | Ministry of Finance |
| Who is caught | UAE Constituent Entities, plus joint ventures and certain stateless entities | FTA scope guide |
| First applies to | Fiscal years starting on or after 1 January 2025 | Ministry of Finance |
| Out of scope | Groups operating only within the UAE; investment entities; excluded entities | FTA, Ministry of Finance |
| Income Inclusion Rule | Not applied by the UAE (no controlled foreign company regime) | Ministry of Finance |
The Ministry of Finance also carves out groups in the initial phase of international activity where no Income Inclusion Rule applies to any UAE entity in the group. Governmental entities, non-profits, pension funds and certain investment funds are covered by a separate FTA guide on excluded entities (TTGEIE1, issued 26 August 2026).
Does it apply to my SME or free zone company?
Almost certainly not, if your company is an independent UAE business or part of a group below EUR 750 million. A company with AED 5m to 50m of revenue is far below the threshold, and a group that trades only in the UAE is out of scope regardless of size.
It can still reach you in two situations: your UAE company is a subsidiary of a large foreign group, or it is a UAE entity of a group that has revenue above the threshold elsewhere. Free zone status does not exempt a company by itself. Our reading of the rules: because the UAE's 9% headline rate and the 0% Qualifying Free Zone Person rate sit below 15%, a UAE entity of an in-scope group can show a low effective rate. The Ministry of Finance's own page doesn't spell this out, so test it with the group's tax team rather than assuming either way.
Say a Dubai trading company is owned by a foreign group with revenue above the threshold. If the UAE entity's profits are taxed at 0% as qualifying free zone income, the gap to 15% is exactly what the UAE Domestic Minimum Top-up Tax is designed to collect. This is a simplified illustration; the actual computation follows the GloBE rules and includes adjustments and safe harbours.
What is the rate, and which safe harbours exist?
The target is a 15% minimum effective tax rate, applied entity by entity in the UAE under the GloBE-style rules. Ministerial Decision No. 88 of 2025, announced on 16 April 2025, adopted the OECD's administrative guidance and commentary issued up to January 2025, so the UAE computation follows the OECD's reading.
Secondary summaries of Cabinet Decision No. 142 of 2024 describe a transitional country-by-country reporting safe harbour, a de minimis test and a permanent simplified computation. We could not open the decision text itself, so treat the details as a pointer and read the decision before relying on them. Groups should test safe harbours every year and still register and comply when the answer is zero.
When do you register and file?
Registration comes first, and it is the near-term deadline: the FTA's registration rules are tied to the end of the first in-scope fiscal year. Baker McKenzie's July to September 2026 quarterly update reports FTA Decision No. 12 of 2026 (4 August 2026) as setting registration within seven months after the end of the first in-scope fiscal year, and 30 November 2026 for entities whose first in-scope fiscal year ended before 30 April 2026. A group with a 31 December 2025 year end falls in that second category.
| Step | What is required | Status of source |
|---|---|---|
| Registration | Seven months after the end of the first in-scope fiscal year; 30 November 2026 for years ended before 30 April 2026 | Reported by a law firm; confirm in the FTA decision and guide TTGREG1 |
| Registration route | Through a Domestic Designated Filing Entity, or entity by entity | Reported by a law firm |
| Pillar Two Information Return | Filed by each UAE Constituent Entity, joint venture and relevant stateless entity, or by its Designated Local Entity (Ministerial Decision No. 133 of 2026) | Ministry of Finance, 25 August 2026 |
| Top-up Tax return and payment | Described in secondary summaries as due 15 months after year end (18 months for the first year) | Not verified from the decision text |
Accurate as of 4 November 2026.
If you'd rather not track these dates by hand, the free UAE compliance calendar lists the tax and compliance deadlines that apply to your company.
How do you register for the top-up tax?
Registration is done with the FTA, and the FTA's Scope and Registration guide (TTGREG1, issued 26 August 2026) explains the process. In outline:
- Work out whether your group meets the EUR 750 million test in the ultimate parent entity's consolidated statements.
- List every UAE Constituent Entity, joint venture and relevant stateless entity in the group, and decide whether to register through a Domestic Designated Filing Entity or entity by entity.
- Check the FTA's scope guide and excluded-entities guide for each entity.
- Register on the FTA's online system, EmaraTax, within the deadline that applies to the group's first in-scope fiscal year.
- Calendar the Pillar Two Information Return and the top-up tax return, and confirm the filing dates in the FTA's published decisions.
15%: the minimum effective tax rate that the UAE Domestic Minimum Top-up Tax is designed to secure on UAE profits of in-scope groups. Source: Ministry of Finance announcement on the Domestic Minimum Top-up Tax, and Cabinet Decision No. 142 of 2024, checked 4 November 2026.
What most guides don't tell you
- A zero result still needs a registration. Entities in scope must register even when a safe harbour brings the amount payable to nil, so "we owe nothing" is not a reason to skip the registration step.
- The revenue test sits at group level, so a small UAE subsidiary can be in scope. A subsidiary with a few million dirhams of turnover is caught if its ultimate parent crosses the threshold. If you're a UAE subsidiary, ask the parent's tax team for the group revenue test result.
- The deadline depends on the group's year end. A December year end means the first in-scope fiscal year closed before 30 April 2026, which puts it in the reported 30 November 2026 category. A group with a later year end may have a different date.
- Free zone planning does not remove the exposure. A 0% rate on qualifying income is not a way out of the DMTT for an in-scope group; it is the situation the tax is aimed at.
Which deadlines apply to your company?
The dates that matter for a standalone UAE company or a member of a larger group come from its licence, its tax periods and its filings. The free UAE compliance calendar turns a few questions about your company into a personalised calendar of its UAE tax and compliance deadlines, as a PDF and calendar file.
Frequently asked questions
Does Pillar Two apply to my UAE business?
It applies only if your company is part of a group with consolidated revenue of EUR 750 million or more in at least two of the four preceding fiscal years; a group operating only within the UAE is out of scope. The UAE applies a domestic minimum top-up tax but not the Income Inclusion Rule.
Does the UAE have withholding tax?
As of November 2026, the Ministry of Finance states that withholding tax on non-resident persons without a UAE permanent establishment applies at a rate of 0%. The Domestic Minimum Top-up Tax is a different tax and is not a withholding tax.
Can working from Dubai for a foreign employer create a permanent establishment?
It can, but it depends on the facts of the arrangement. Ministerial Decision No. 83 of 2023 and the FTA's guide for non-resident persons set the tests, so get advice on your specific situation.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- Ministry of Finance: UAE Domestic Minimum Top-up Tax
- Ministry of Finance: announcement of OECD Transitional Qualified Status for the DMTT (25 August 2025)
- Ministry of Finance: amendments to the Corporate Tax Law (Federal Decree-Law No. 60 of 2023)
- Ministry of Finance: Ministerial Decision No. 88 of 2025 adopting OECD guidance
- Ministry of Finance: Ministerial Decision No. 133 of 2026 on the Pillar Two Information Return
- Ministry of Finance: Pillar Two guidance paper
- Ministry of Finance: Corporate Tax in the UAE
- FTA: Cabinet Decision No. 142 of 2024 on Top-up Tax
- FTA: news on the Scope and Registration guide for Top-up Tax (7 October 2026)
- FTA: Corporate Tax guides and references (TTGREG1 and TTGEIE1, 26 August 2026)
- FTA: Ministerial Decision No. 83 of 2023
- Interpretation only: Baker McKenzie MENA quarterly tax update, July to September 2026 (source for FTA Decision No. 12 of 2026 registration timing), PwC and EY alerts on Cabinet Decision No. 142 of 2024 (source for return timing and safe harbours).
Last checked: 04 November 2026
This is general information, not tax or legal advice for your specific situation.