The UAE will implement a 15% Domestic Minimum Top-up Tax (DMTT) on large multinational companies starting January 2025, the finance ministry announced. The tax is part of the OECD’s global minimum corporate tax agreement, which aims to ensure multinational enterprises pay a minimum effective tax rate of 15% in each country where they operate.
The DMTT will apply to companies with consolidated global revenues of €750 million ($793.50 million) or more in at least two of the four financial years preceding the tax’s enforcement. This move comes after the UAE introduced a 9% corporate tax in 2023, exempting companies operating in free zones.
The DMTT aligns with the OECD’s Two-Pillar Solution to prevent tax avoidance and ensure fair taxation of large multinationals. The UAE’s finance ministry is also evaluating additional corporate tax incentives. These include a research and development (R&D) incentive, starting in 2026, offering a 30%- 50% refundable tax credit based on the size of a company’s UAE operations and revenue.
Another potential measure, a refundable tax credit for high-value employment activities, could be introduced as early as January 1, 2025, and calculated as a percentage of eligible employee income costs.
