UAE To Introduces 15% Minimum Tax Rate for Multinationals6 min read
- 13.12.2024
- Posted by: Malavika Kolera
- Categories: Dubai, Tax
The United Arab Emirates is set to implement significant changes to its corporate tax landscape, introducing a 15% minimum top-up tax for large multinational enterprises while simultaneously offering attractive incentives for research and development and high-value employment. These developments mark a crucial shift in the UAE’s tax policy, aligning with global standards while maintaining its competitive edge in the region.
New Minimum Tax Rate Implementation
Starting 01.01.2025, multinational companies operating in the UAE will face a new tax requirement through the Domestic Minimum Top-Up Tax (DMTT). This regulation specifically targets large enterprises meeting specific revenue thresholds:
- Applicable to companies with consolidated global revenue of EUR 750 million or more
- The revenue threshold must be met in at least two of the four preceding financial years
- Ensures a minimum effective tax rate of 15% on profits in each country of operation
This initiative aligns with the Organisation for Economic Co-operation and Development (OECD) two-pillar solution, demonstrating the UAE’s commitment to international tax transparency and fairness standards.
Research and Development Tax Credit
For tax periods beginning in 2026, businesses can benefit from:
- A refundable tax credit ranging from 30% to 50%
- Credit amount based on company size and UAE revenue
- Designed to encourage innovation and technological advancement
High-Value Employment Incentive
Coming into effect as early as 01.01.2025, this incentive offers:
- Refundable tax credits based on eligible salary costs
- Focus on C-suite executives and senior personnel
- Support for core business functions that enhance UAE’s economic value
- Aimed at strengthening the Emirates’ global competitiveness
Impact on Business Operations
These tax changes represent a strategic balance between global compliance and maintaining the UAE’s attractive business environment. Companies operating or planning to establish operations in the UAE should:
- Evaluate their global revenue to determine if they fall under the DMTT requirements
- Assess potential eligibility for the new tax incentives
- Plan for implementation of necessary compliance measures
- Consider the timing of new investments or expansions in relation to these changes
Looking Forward
While the final implementation details await legislative approval, these changes signify the UAE’s commitment to maintaining its position as a leading global business center while adhering to international tax standards. The Ministry of Finance has committed to providing comprehensive guidance for taxpayers regarding these new regulations and incentives.
How TME Services Can Support Your Business
As these changes approach implementation, businesses operating in the UAE should seek professional guidance to ensure compliance and maximize available benefits.
Our comprehensive services are designed to support you every step of your business journey in the UAE:
- Company Formation: We guide you through all aspects of setting up your company, whether in a free zone or on the mainland, ensuring you choose the best option for your business.
- Visa and Emirates ID Services: We streamline the process of securing visas and Emirates IDs for you and your employees, allowing you to focus on your business operations.
- Accounting: Our team ensures your business stays compliant with local financial regulations, which is crucial for maintaining good standing in Dubai’s business community.
- Tax: We help manage Dubai’s tax environment, ensuring your business remains compliant while optimizing your tax position.
- Business Consulting: Leveraging our deep understanding of Dubai’s market, we provide valuable insights and help you develop effective strategies to succeed.
Visit our services page to learn more about everything we do.
