UAE Announces 15% Minimum Top-Up Tax for Large Corporates from 2025

The UAE’s finance ministry plans to introduce minimum top-up tax (DMTT) to align its corporate tax structure with global standards and enhance non-oil revenue. This includes introducing a 15% DMTT on large corporates operating from the UAE from January 2025 onwards. 

The DMTT aligns with the OECD’s global minimum corporate tax agreement, which was signed by 136 countries, including the UAE. The agreement ensures that large multinationals pay at least 15% in taxes, thereby reducing opportunities for tax avoidance. 

Introduction of Minimum Top-Up Tax (DMTT)

As part of recent changes to the corporate tax law, the finance ministry confirmed that the DMTT will apply to corporations with consolidated global revenues of $793.50 million or more in at least two of the four financial years before the tax’s implementation. The UAE serves as a major hub for multinationals in the Middle East. The tax amendments follow the introduction of a 9% corporate tax in 2023, which exempted free zones from corporate tax.

OECD Two-Pillar Solution

The DMTT falls under the Two-Pillar Solution proposed by the Organization for Economic Growth and Co-operation (OECD), which focuses on focuses on instituting a global minimum tax rate for large companies. This means applying a minimum 15% tax rate on profits for large multinational enterprises in every country where they operate. 

New Corporate Tax Incentives Planned

The finance ministry plans to also introduce new corporate tax incentives as follows:

• Research and development (R&D) incentive – Potentially available from 2026 aims to provide a 30-50% refundable tax credit based on the size of a company’s operations and revenue.
• High-value employment incentive – Potentially effective from January 1, 2025, which aims to provide refundable tax credits as a percentage of eligible employee income costs.

These proposed incentives are designed to promote innovation and high-value employment. Nevertheless, they are still subject to legislative approval by the government. 

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