What is the UAE Domestic Minimum Top-up Tax?

The UAE DMTT is a top-up tax that ensures multinational enterprise groups operating in the UAE pay an effective tax rate of at least 15% on their UAE profits. It is the UAE's implementation of the OECD/G20 Pillar Two global minimum tax framework, established under Cabinet Decision No. 142 of 2024.

When does the UAE DMTT take effect?

The DMTT applies to fiscal years starting on or after 1 January 2025. For calendar-year groups, the first DMTT period is FY2025, with the first return due by 30 June 2027 under the 18-month first-year extension.

Who is subject to the UAE DMTT?

The DMTT applies to constituent entities of multinational enterprise groups with consolidated annual global revenues of €750 million (approximately AED 3 billion or US$869 million) or more in at least two of the four financial years immediately preceding the relevant fiscal year. The group must have operations in two or more jurisdictions.

Does the UAE DMTT apply to free zone companies?

Yes, if the free zone entity is part of an in-scope multinational group. The DMTT applies regardless of whether the entity benefits from a 0% Qualifying Free Zone Person rate or other free zone incentives. The 15% effective tax rate floor applies to the group's aggregate UAE profits.

How is the UAE DMTT calculated?

The DMTT is calculated on a jurisdictional basis. Aggregate GloBE income across all UAE constituent entities and joint ventures is divided into aggregate Covered Taxes to derive the UAE effective tax rate. If that rate is below 15%, the DMTT imposes a top-up equal to (15% minus the ETR) multiplied by excess profit.

When is the UAE DMTT return due?

The DMTT return is due within 15 months of the end of the fiscal year, with an 18-month extension for the first year of application. For a calendar-year group, the first DMTT return for FY2025 is due by 30 June 2027.

Are small businesses subject to the UAE DMTT?

No. The DMTT applies only to multinational enterprise groups meeting the €750 million consolidated revenue threshold. Smaller groups and purely domestic UAE groups remain outside the DMTT regime, though they continue to be subject to the standard UAE corporate tax at 9%.

UAE DMTT Explained: The 15% Minimum Tax Reshaping Multinational Strategy in 2026

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