The UAE Ministry of Finance said on Monday that the United Arab Emirates will impose a minimum additional tax of 15% on large multinational companies operating in the country starting from January, as the government seeks to boost non-oil revenues.
The DMTT is part of the OECD’s global minimum corporate tax agreement signed by 136 countries, including the UAE, to ensure big companies pay at least 15% and to make tax evasion more difficult.
In amendments to the corporate tax law, the UAE Ministry of Finance said that the DMTT law will apply to companies with consolidated global revenues of 750 million euros ($793.50 million) or more during at least two of the four fiscal years preceding those in which the tax is imposed. Comes into effect.
The UAE, including Dubai, is a hub for multinational companies in the Middle East, and the tax revisions come a year after the UAE began imposing a 9% business tax, with exemptions for several free zones that support its economy.
The DMTT agreement comes under the Organization for Economic Co-operation and Development (OECD)’s two-pillar solution, which stipulates that large multinational companies pay a minimum effective tax rate of 15% on profits in each country in which they operate.
The UAE Ministry of Finance said it is also considering offering a number of tax incentives to companies, including incentives for research and development (R&D) that will be applied to tax periods starting in 2026.
The ministry added that the spending-based incentive will provide a potential tax credit of between 30% and 50% refundable depending on the size of the company’s operations in the UAE and revenues.
A refundable tax credit for high-value employment activities is also being considered, which will be given to companies as a percentage of employees’ eligible income costs and can be applied as early as January 1, 2025, the ministry said.
These proposed incentives remain subject to legislative approval.