DUBAI – The United Arab Emirates (UAE) will implement a minimum top-up tax (DMTT) of 15% on large multinational companies operating within the country starting January 2025. The initiative, announced by the Ministry of Finance, aims to boost non-oil revenue.
The DMTT is part of the OECD’s global minimum corporate tax framework, which ensures large corporations pay a minimum tax rate of 15% in every jurisdiction where they operate, curbing tax avoidance strategies.
Eligibility and Scope
The UAE’s finance ministry stated that the DMTT will apply to multinational companies with consolidated global revenue of €750 million ($793.50 million) or more in at least two of the four financial years preceding the tax’s enforcement.
This amendment builds on the UAE’s introduction of a 9% corporate tax in 2023, which offered exemptions for companies in free zones—a cornerstone of the nation’s economy.
Incentives Under Consideration
To complement the DMTT, the finance ministry is exploring corporate tax incentives to encourage research and development (R&D) and high-value employment. These include:
- R&D Tax Credit: A refundable tax credit ranging from 30%-50% based on R&D expenditure and operational scale, set to begin in 2026.
- Employment Incentives: A refundable tax credit linked to eligible employee costs, potentially effective as early as January 2025.
These measures aim to maintain the UAE’s appeal as a global business hub while aligning with international tax standards.
