01Taxation
The UAE minimum tax, article by article
Scope, data, effective tax rate and registration under the UAE Domestic Minimum Top-up Tax.
Written by Ajit Jain, founder of Averise. Last reviewed .
The UAE Domestic Minimum Top-up Tax is imposed by Cabinet Decision No.
142 of 2024. It applies to groups with EUR 750 million of consolidated revenue in at least two of the four preceding Fiscal Years. Averise tests scope, models the UAE effective tax rate and supports registration and returns.
Scope
The group revenue test
Data
Income and taxes by entity
Effective rate
One rate for the jurisdiction
Top-up tax
The gap up to the minimum rate
Registration and filing
With the tax authority
01
Scope and timing
Article 1.1.1 applies the Decision to Constituent Entities of an MNE Group with annual revenue of EUR 750 million or more in at least two of the four Fiscal Years immediately preceding the tested Fiscal Year. Article Two applies it to Fiscal Years beginning on or after 1 January 2025.
Article 2.1 makes Constituent Entities located in the UAE liable to pay. Our free scope checker runs the Article 1.1.1 test in your browser.
02
The calculation
Article 5.1.1 computes one effective tax rate for all UAE Constituent Entities together. Article 5.2.1 sets the Top-up Tax Percentage as the Minimum Rate less that rate. Article 18.1 defines the Minimum Rate as 15%.
Article 5.3.1 reduces the profit exposed to top-up tax by the Substance-based Income Exclusion. Articles 5.3.2 to 5.3.4 build that exclusion from carve-outs for payroll and tangible assets in the UAE.
03
What we do
Each step produces a dated working paper that cites the article it applies.
- Scope assessment, including mergers and demergers under Article 6.1
- Data readiness: which accounts and adjustments the calculation needs
- Effective tax rate and top-up tax modelling
- Safe harbour review under Articles 8.2.1 and 8.2.2
- Registration and return support
04
Registration and early-year relief
Article 13.1 requires an Entity subject to Top-up Tax to register with the FTA within the timeline the FTA prescribes. The FTA's Guide TTGREG1 attributes those timelines to FTA Decision No. 12 of 2026. Confirm your registration deadline with the FTA.
Article 14.3 disapplies penalties connected with filing the Top-up Tax Return or the Pillar Two Information Return for early years, where the FTA considers the group took reasonable measures. It covers a Fiscal Year beginning on or before 31 December 2026, but not one that ends after 30 June 2028.
Questions clients ask
- Which groups are in scope of the UAE DMTT?
- Under Article 1.1.1 of Cabinet Decision No. 142 of 2024, MNE Groups with annual revenue of EUR 750 million or more in the Ultimate Parent Entity's Consolidated Financial Statements in at least two of the four Fiscal Years before the tested year.
- From when does the UAE DMTT apply?
- Article Two of Cabinet Decision No. 142 of 2024 applies it to Fiscal Years beginning on or after 1 January 2025.
- Does a safe harbour remove the duty to register?
- According to the FTA's Guide TTGREG1, section 8.2, no. An Entity whose Top-up Tax is deemed zero under a safe harbour is still subject to Top-up Tax and must register under Article 13.1. The Guide states it is not legally binding.
- When is the registration deadline?
- Article 13.1 of Cabinet Decision No. 142 of 2024 leaves the timeline to the FTA. Confirm your registration deadline with the FTA for your group's Fiscal Year.
Sources
- Cabinet Decision No. 142 of 2024 on the Imposition of Top-up Tax on Multinational Enterprises, Articles One to Three of the Decision, and Articles 1.1.1, 2.1, 5.1.1, 5.2.1, 5.3.1 to 5.3.4, 6.1, 8.2.1, 8.2.2, 13.1, 14.3 and 18.1. Official Gazette text.
- FTA, Top-up Tax Guide: Scope and Registration (TTGREG1). The FTA's stated position; section 2.6 says it is not legally binding.
General information, not advice on your facts.
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