Starting January 1, 2025, the UAE is implementing a 15% Domestic Minimum Top-Up Tax (DMTT) targeting multinational enterprises (MNEs) with global revenues of €750 million or more. This aligns the UAE with the OECD’s Pillar Two framework, ensuring that large MNEs pay a minimum effective corporate tax rate of 15% on UAE-sourced profits.
What Is the DMTT?
The DMTT acts as a top-up tax. If an MNE pays less than 15% on profits in the UAE (due to Free Zone benefits or deductions), this rule brings the total tax up to 15%. The aim is to reduce profit shifting and keep tax revenue within the UAE.Why It Matters?
- Applies to MNEs benefiting from low or zero tax rates
- Could impact Free Zone companies within large MNE groups
- Reinforces UAE’s commitment to international tax transparency
- Helps the UAE retain taxing rights and prevent revenue leakage
What Businesses Should Do?
- Recalculate your effective tax rate
- Assess Free Zone Structures and global tax positioning
- Prepare for compliance and reporting under the new rules
- Consult experts for tailored corporate tax strategy
Key Highlights
- Effective Date: January 1, 2025
- Who’s Affected: MNE’s with €750M+ consolidated global revenue
- Tax Impact: Minimum 15% effective rate on UAE profits
- Framework: OECD’s Pillar Two (BEPS) model
Need Help Navigating DMTT?
At EMC (emcme.ae), we specialize in guiding multinational groups through the
UAE’s evolving tax landscape. Our experts provide strategic corporate tax planning, DMTT
compliance, and OECD Pillar Two alignment.
Book your free consultation today at www.emcme.ae or email us at info@emcme.ae.
Let us help you stay compliant—and competitive.