New guide outlines the UAE’s top-up tax for multinationals

By the Editorial Team · Thursday, October 8, 2026

The UAE Federal Tax Authority has published a detailed guide on the Qualified Domestic Minimum Top-up Tax (QDMTT), outlining which multinational enterprise groups must register and comply with the new tax requirements starting from fiscal year 2025. This tax is part of the UAE’s implementation of the OECD/G20 Pillar Two rules, aimed at ensuring a minimum 15% effective tax rate and maintaining the country’s primary taxing rights over local profits.

The United Arab Emirates Federal Tax Authority (FTA) has released a comprehensive guide detailing the scope and registration process for the nation’s Qualified Domestic Minimum Top-up Tax (QDMTT) targeting multinational enterprise (MNE) groups. The guide clarifies which MNE groups and UAE-based entities fall under the top-up tax and provides instructions on how affected parties should register.

The QDMTT applies to MNE groups with annual consolidated revenue of at least €750 million (approximately Dh3.08 billion) in two or more of the four fiscal years prior to the year under review. However, groups whose operations are entirely within the UAE are excluded from the top-up tax regardless of their revenue levels.

This new tax framework is part of the UAE’s implementation of the OECD/G20 Two-Pillar Solution, aimed at addressing tax challenges arising from the digitalization of the global economy. Specifically, the QDMTT fulfills obligations under the Global Anti-Base Erosion (GloBE) rules of Pillar Two, which establish a minimum effective tax rate of 15% that MNE groups must meet in each country where they conduct business.

The UAE’s top-up tax enables the country to maintain primary taxing rights over profits generated within its jurisdiction by covered entities. Notably, the UAE received “transitional qualified” status in the OECD’s central record on August 18, 2025, signaling its commitment to aligning with the global tax standards outlined in the GloBE Model Rules.

The guide issued by the FTA includes practical examples addressing various entity types, such as permanent establishments, joint ventures, flow-through entities, and hybrid entities. It also outlines how to determine the location of entities and permanent establishments, registration requirements, relevant deadlines, and the filing process for the Pillar Two Information Return.

The QDMTT legislation applies to fiscal years beginning on or after January 1, 2025. The FTA emphasized that the guide is intended to assist businesses in understanding their compliance obligations within the evolving tax landscape.

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