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UAE 15% Minimum Tax 2026: Who Pays the New DMTT

UAE domestic minimum top-up tax DMTT 2026 15% minimum tax rate infographic

11 min read

What Is the UAE Domestic Minimum Top-Up Tax (DMTT)?

The UAE Domestic Minimum Top-Up Tax is a 15% minimum effective tax rate imposed on UAE entities of large multinational groups under Cabinet Decision No. 142 of 2024, effective for financial years starting on or after 1 January 2025. It means the famous 9% UAE corporate tax rate, and even the 0% free zone rate, no longer tells the full story for the biggest companies operating in the country. In this guide, Qaspro Global explains exactly who is in scope, how the top-up is calculated, and what in-scope groups must do before their first DMTT filing.

Quick Answer: The UAE DMTT applies a 15% minimum effective tax rate to UAE entities of multinational groups with consolidated global revenue of EUR 750 million or more in at least 2 of the 4 preceding financial years, under Cabinet Decision 142 of 2024. It took effect for financial years starting 1 January 2025. Companies below the threshold continue paying only the standard 9% corporate tax.

Who Has to Pay the UAE DMTT?

The UAE DMTT applies to Constituent Entities of multinational enterprise (MNE) groups with annual global revenue of EUR 750 million or more (roughly AED 3 billion) in the consolidated financial statements of the Ultimate Parent Entity, in at least 2 of the 4 financial years immediately preceding the year in question. Both conditions come directly from Cabinet Decision No. 142 of 2024 and mirror the OECD Pillar Two GloBE Model Rules.

In practice, the test works like this:

Step 1: Identify the Ultimate Parent Entity (UPE) of the group, wherever it is headquartered
Step 2: Check the UPE’s consolidated revenue for each of the 4 financial years before the current one
Step 3: If revenue was EUR 750 million or more in any 2 of those 4 years, every UAE entity in the group is a Constituent Entity in scope of the DMTT

The threshold is tested at group level, not entity level. A small Dubai subsidiary with AED 5 million of local revenue is fully in scope if its global parent crosses EUR 750 million. Purely domestic UAE groups and standalone companies, however large locally, are outside the DMTT unless they have foreign operations that make them an MNE group crossing the threshold.

How Is the 15% Top-Up Tax Calculated?

The DMTT charges the difference between 15% and the group’s actual UAE effective tax rate, applied to the UAE profits of the group. The calculation follows the OECD GloBE methodology, which the UAE formally adopted through Ministerial Decision No. 88 of 2025 (the OECD Commentary and Agreed Administrative Guidance, effective 1 January 2025).

Simplified worked example: a multinational’s UAE entities earn combined adjusted profits of AED 100 million and pay AED 9 million of UAE corporate tax. Their UAE effective tax rate is 9%. The top-up percentage is 15% minus 9%, which is 6%. Before adjustments such as the substance-based income exclusion, the DMTT due is approximately AED 6 million. The actual computation applies GloBE adjustments to both income and covered taxes, so in-scope groups need Pillar Two data systems, not just their existing IFRS corporate tax computations.

Scenario	UAE Effective Tax Rate	DMTT Top-Up	Total Minimum Burden
Mainland company paying full 9% CT	~9%	~6%	15%
Free zone QFZP on 0% qualifying income	~0%	~15%	15%
Mixed group (some 0%, some 9% entities)	Blended 0-9%	Difference to 15%	15%
Group below EUR 750M threshold	0% or 9% as normal	None	0% or 9%

Does the DMTT Apply to Free Zone Companies?

Yes. A Qualifying Free Zone Person paying 0% corporate tax is still a Constituent Entity if its group crosses the EUR 750 million threshold, and the DMTT tops its effective rate up to 15%. The 0% free zone incentive effectively disappears for in-scope multinationals, because whatever the UAE does not collect under the corporate tax law is collected through the top-up.

This is the single most misunderstood point about the DMTT. Free zone structures remain fully valuable for the thousands of businesses below the threshold, and our guide to QFZP status and the 0% rate still applies to them unchanged. But for groups above EUR 750 million, locating profit in a UAE free zone no longer reduces the group’s minimum tax below 15%. The UAE deliberately designed it this way: if the UAE did not collect the top-up domestically, the parent company’s home country would collect the same amount under its own Pillar Two rules. The DMTT keeps that revenue in the UAE.

Who Is Excluded from the UAE DMTT?

The UAE DMTT excludes investment entities, MNE groups in the initial phase of international activity, and the categories of excluded entities defined in the GloBE rules, such as government entities, international organisations, non-profit organisations, and pension funds. Two UAE-specific design choices, confirmed by the Ministry of Finance, matter most:

Investment entities: Constituent Entities that meet the requirements to be classified as an investment entity are not subject to the UAE DMTT rules.
Initial-phase international groups: MNE groups in the initial phase of international activity are excluded where no Income Inclusion Rule applies to any UAE Constituent Entity in the group structure. This typically covers groups with operations in few jurisdictions and limited tangible assets abroad.
No Income Inclusion Rule (IIR): The UAE chose not to implement the IIR at this stage, because the UAE corporate tax regime has no controlled foreign company rules. The UAE applies only the domestic top-up on UAE profits.

One deviation from the standard GloBE design: the UAE DMTT does not exclude non-wholly owned Constituent Entities. The Ministry of Finance confirmed the rules were deliberately designed so this and other variations do not compromise the QDMTT Safe Harbour status of the regime.

What Is the QDMTT Safe Harbour and Why Does It Matter?

The QDMTT Safe Harbour means that when the UAE collects its qualified domestic top-up tax, other countries set their top-up calculation for UAE profits to zero, so in-scope groups are not taxed twice on the same UAE income. The OECD has published the UAE DMTT on its Central Record of legislation with transitional qualified status, which gives groups certainty that paying the UAE top-up satisfies the Pillar Two liability on UAE profits.

For CFOs this has a practical meaning: the group’s Pillar Two compliance for UAE operations is handled in the UAE, through EmaraTax, rather than through the parent jurisdiction’s IIR return. It also means the UAE filing must be done properly, because the safe harbour protection assumes a correctly computed qualified DMTT.

DMTT vs Corporate Tax: Two Separate Compliance Tracks

The DMTT is a separate tax from UAE corporate tax, with its own registration, its own return, and its own deadline. Filing your corporate tax return does not discharge any DMTT obligation. The key differences:

Factor	UAE Corporate Tax	UAE DMTT
Legal basis	Federal Decree-Law 47 of 2022	Cabinet Decision 142 of 2024
Rate	9% above AED 375,000 (0% for QFZP qualifying income)	Top-up to 15% effective rate
Who pays	All taxable persons	Only MNE groups with EUR 750M+ global revenue
Effective from	Financial years starting 1 June 2023	Financial years starting 1 January 2025
Filing deadline	9 months after financial year end	15 months after year end (18 months for the first, transition year)
Registration	CT registration on EmaraTax	Separate DMTT registration on EmaraTax

For a calendar-year group, that means the FY2025 corporate tax return is due by 30 September 2026, while the first DMTT return for the same year follows under the longer transition-year window. The corporate tax deadline arrives first: see our September 30 CT filing guide for that workstream, and our walkthrough of paying corporate tax through GIBAN once the return is filed.

What Should In-Scope Groups Do Now?

UAE entities of in-scope multinationals should complete five steps during 2026, in this order:

1. Confirm scope: test the UPE’s consolidated revenue against EUR 750 million for 2 of the 4 years preceding FY2025 and FY2026
2. Register for DMTT: the separate DMTT registration is available on EmaraTax and is distinct from your corporate tax registration
3. Build the GloBE data pack: the DMTT computation needs adjusted GloBE income, covered taxes, payroll and tangible asset data for the substance-based income exclusion, mapped from IFRS consolidation systems
4. Check transitional safe harbours: groups with qualifying Country-by-Country Reporting data may qualify for transitional CbCR safe harbour relief that simplifies the first years
5. Coordinate with the group’s Pillar Two team: the UAE numbers feed the group’s global GloBE Information Return, so timelines and data definitions must match

Qaspro Global, a UAE-based tax and accounting consultancy, advises group finance teams to run the scope test now rather than waiting for the parent company to ask, because UAE-side registration and data readiness take months, and the corporate tax and transfer pricing positions of UAE entities directly affect the group’s UAE effective tax rate.

Group entities exiting the UAE should also remember corporate tax deregistration: 3 months from cessation, or AED 1,000 per month in penalties.

Frequently Asked Questions

What is the UAE DMTT rate?

The UAE DMTT tops up the effective tax rate on UAE profits of in-scope multinational groups to 15%, under Cabinet Decision 142 of 2024. The top-up equals 15% minus the group’s actual UAE effective tax rate.

When did the UAE DMTT come into effect?

The DMTT is effective for financial years starting on or after 1 January 2025. For a calendar-year group, FY2025 is the first year in scope, with the first filings falling due in 2027 under the transition-year window.

Who is subject to the UAE domestic minimum top-up tax?

UAE Constituent Entities of multinational groups with consolidated global revenue of EUR 750 million or more in at least 2 of the 4 preceding financial years. The test applies at group level using the Ultimate Parent Entity’s consolidated financial statements.

Does the DMTT affect small and medium businesses in the UAE?

No. Businesses that are not part of a multinational group with EUR 750 million or more in global revenue are completely outside the DMTT. They continue to pay standard UAE corporate tax at 9% above AED 375,000 of taxable income.

Do free zone companies pay the 15% minimum tax?

Free zone entities of in-scope multinational groups do. A Qualifying Free Zone Person’s 0% rate is topped up to 15% if its group crosses the EUR 750 million threshold. Free zone companies outside such groups keep their 0% qualifying income rate unchanged.

Is the UAE DMTT the same as OECD Pillar Two?

The UAE DMTT is the UAE’s domestic implementation of the Pillar Two minimum tax. It is closely aligned with the OECD GloBE Model Rules, and Ministerial Decision 88 of 2025 formally adopted the OECD Commentary and Administrative Guidance for interpreting it.

Did the UAE introduce an Income Inclusion Rule?

No. The UAE decided not to implement the Income Inclusion Rule at this stage because its corporate tax regime has no controlled foreign company rules. The UAE applies only the domestic top-up tax on UAE profits and will monitor whether an IIR is needed later.

Is the UAE DMTT a qualified tax under OECD rules?

The OECD has published the UAE DMTT on its Central Record of legislation with transitional qualified status. This gives the UAE regime QDMTT Safe Harbour protection, meaning other jurisdictions reduce their top-up on UAE profits to zero.

How do I register for DMTT in the UAE?

DMTT registration is done through the FTA’s EmaraTax portal and is separate from corporate tax registration. In-scope groups must register their UAE Constituent Entities even though the filing deadline falls 15 to 18 months after the financial year end.

Does paying DMTT replace the 9% corporate tax?

No. In-scope entities pay UAE corporate tax under Federal Decree-Law 47 of 2022 first, and the DMTT then tops the combined effective rate up to 15%. Both returns must be filed separately on EmaraTax with different deadlines.

Need Expert Help?

Qaspro Global’s tax consultants help UAE entities of multinational groups run the EUR 750 million scope test, register for DMTT on EmaraTax, and build the GloBE data pack alongside the corporate tax return. Contact us today for a free consultation on your group’s Pillar Two exposure.