The UAE’s new corporate tax regime and the introduction of the Domestic Minimum Top-up Tax are prompting companies to reassess deal structures and valuations.
The 9% corporate tax has already led firms to explore tax-efficient models, particularly by leveraging Free Zones that offer a 0% rate for qualifying entities.
The top-up tax raises the effective tax rate to 15% for UAE entities that are part of multinational groups, in line with OECD global minimum tax rules. This adds complexity to tax planning, profit forecasting, and group structuring.
M&A activity may face delays as investors revisit valuations and conduct extended due diligence to assess tax risk. Some firms are expected to consolidate operations or exit certain markets to manage exposure.
While these changes create pressure on existing models, the UAE is likely to introduce new tax incentives to retain its position as a leading investment destination. The current focus is on strategic restructuring to balance compliance and competitiveness.
