The UAE has announced a new tax regulation requiring large multinational enterprises (MNEs) to pay a minimum effective tax rate of 15% on their profits. The Domestic Minimum Top-up Tax (DMTT) will apply to businesses with consolidated global revenues of €750 million (approximately Dh3 billion) or more in at least two of the four financial years prior to its enforcement.
According to a Khaleej Times report, the Ministry of Finance confirmed that the DMTT will be effective for financial years starting on or after January 1, 2025, aligning with global tax standards under the Organisation for Economic Co-operation and Development’s (OECD) Two-Pillar Solution. Additional details on the legislation are expected to be released soon.
To further stimulate economic growth, the Ministry is also considering new corporate tax incentives, including a refundable research and development (R&D) tax credit set to launch in 2026. This initiative aims to promote innovation and economic development by offering a 30-50% expenditure-based tax credit for qualifying R&D activities conducted within the UAE.
Another proposed incentive, effective January 2, 2025, would provide refundable tax credits for high-value employment activities. This aims to attract top-tier talent and enhance the UAE’s global competitiveness by granting tax credits tied to eligible salary costs for senior executives and other high-value roles contributing to the economy.
The final implementation of these incentives remains subject to legislative approval.
