Multinational Companies Tax and Global Minimum Tax 15% in the UAE

What Is the Global Minimum Tax?

The Global Minimum Tax is an international tax framework designed to ensure that large multinational enterprise groups are subject to a minimum effective tax rate of 15%.

In the UAE, these rules are implemented through the Domestic Minimum Top-up Tax (DMTT) framework and related regulations.

Who Is Subject to These Rules?

The rules generally apply to entities that are part of multinational enterprise groups with consolidated global revenues of EUR 750 million or more under the applicable requirements.

• Ultimate Parent Entities.
• Subsidiaries.
• Permanent Establishments.
• UAE-based group entities.
• Multinational enterprise groups within the scope of Pillar Two.

Does It Apply to Small and Medium-Sized Businesses?

No. These rules are not intended for ordinary SMEs and do not apply simply because a company is incorporated in the UAE or located in a free zone.

The application depends on the size of the multinational group and its consolidated global revenue.

Difference Between Corporate Tax and Global Minimum Tax

UAE Corporate Tax applies to businesses operating in the UAE under the Corporate Tax Law.

The Global Minimum Tax framework applies specifically to large multinational enterprise groups that fall within the scope of OECD Pillar Two rules.

Our Services for Multinational Enterprise Groups

Scope Assessment

• Reviewing group structure.
• Analyzing consolidated revenue.
• Determining whether Pillar Two applies.
• Assessing potential tax risks.

International Group Structure Review

• Ultimate parent entity review.
• Subsidiary review.
• Foreign branch review.
• UAE entity review.

Tax Compliance Support

• Reviewing tax obligations.
• Reviewing required information.
• Preparing compliance files.
• Reviewing supporting documentation.

Tax Issue Resolution

• Scope determination issues.
• Classification errors.
• Group structure issues.
• Compliance requirements.
• International tax risks.

Relationship with UAE Corporate Tax

A multinational enterprise group may be required to comply with UAE Corporate Tax while also reviewing whether it falls within the scope of the Global Minimum Tax framework.

Therefore, the Global Minimum Tax should not be viewed as a replacement for Corporate Tax. It may create additional obligations for certain multinational groups.

Relationship with Free Zones

Free zone entities that belong to multinational enterprise groups may need to review both their Free Zone Corporate Tax position and the application of Global Minimum Tax rules.

Being located in a free zone does not automatically exclude an entity from the scope of Pillar Two requirements.

Required Records and Documentation

• Consolidated financial statements.
• Ultimate parent entity information.
• Ownership structure documentation.
• Subsidiary information.
• International tax reports.
• Transfer pricing documentation.
• Country-by-country tax information.

Tax Review and Compliance

These rules require accurate financial information, well-maintained records, and coordination between UAE entities and the ultimate parent company.

Errors in scope determination or reporting may create additional tax exposure and compliance risks.

Tax Penalties and Violations

Penalties may arise due to non-compliance, inaccurate reporting, or failure to maintain required records and documentation.

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