Tax & compliance
The 15% Domestic Minimum Top-up Tax
From financial years beginning on or after 1 January 2025, multinational groups above the Pillar Two threshold pay an effective 15% on their UAE profits. The 9% headline rate no longer describes them.
The rule
What the law actually requires.
The Domestic Minimum Top-up Tax implements the OECD's Pillar Two global minimum tax within the UAE. It applies to constituent entities of multinational enterprise groups with consolidated global revenues of EUR 750 million or more in at least two of the four preceding financial years, and takes effect for financial years beginning on or after 1 January 2025. Where such a group's effective tax rate on its UAE profits falls below 15%, a top-up charge brings it up to that level.
The policy logic is worth understanding because it explains why the UAE introduced a tax it did not need. Under Pillar Two, if the UAE does not collect the top-up on profits earned here, another country in which the group operates will collect it instead under the income inclusion rule. The revenue leaves the country either way; a domestic top-up simply keeps it here. The UAE has designed its regime to meet the QDMTT Safe Harbour, which means in-scope groups should not need a separate GloBE computation for UAE profits and no further top-up should be charged elsewhere. For companies below the threshold — the overwhelming majority — nothing changes.
Thresholds and deadlines
- Rate
- 15% effective on UAE profits
- Threshold
- EUR 750m consolidated revenue in 2 of the preceding 4 years
- Effective
- Financial years beginning on or after 1 January 2025
- Mechanism
- Top-up to 15% where the effective rate falls below it
- Safe harbour
- Designed to qualify for the QDMTT Safe Harbour
- Below threshold
- Unaffected — the 9% regime continues to apply
The compliance calendar
What to do
The filing, step by step.
- Test the group revenue thresholdEUR 750 million consolidated, in at least two of the four preceding financial years. This is a group test, not an entity test.
- Identify every UAE constituent entityIncluding free zone companies, which are within scope regardless of a qualifying position.
- Compute the UAE effective tax rateA group paying 0% under a qualifying free zone position has an effective rate well below 15% and will be topped up.
- Assess the safe harbour positionA qualifying domestic regime should avoid a separate GloBE computation and further top-up elsewhere.
- Coordinate with group tax reportingThis is not a standalone UAE exercise — it sits inside the group's global Pillar Two compliance.
Related
Questions
Only if it is part of a multinational group with consolidated revenues of EUR 750 million or more in two of the last four financial years. Most UAE companies are well below this.
For in-scope groups, effectively yes — a 0% effective rate triggers a top-up to 15%. For everyone else the 0% qualifying rate is unaffected.
Financial years beginning on or after 1 January 2025.
Because under Pillar Two another jurisdiction would collect the top-up instead. A domestic charge keeps the revenue in the UAE.
One question
Which of these applies to your company?
Then it is carrying on a Relevant Activity for economic substance purposes, and a notification is due within six months of the financial period end whether or not it earned anything. The dormant holding vehicle is the entity most often in default.
ESR for holding companiesOr just ask usThen you are probably a Designated Non-Financial Business, with goAML registration, a named compliance officer and reporting obligations that are categorical rather than scaled to headcount. Non-registration is among the most heavily penalised failures in these sectors.
goAML and AML obligationsOr just ask usA residence visa does not do it. The certificate rests on days of presence or defined ties, is issued per treaty partner and per year, and the audience for it is the other country's revenue authority.
The residency conditionsOr just ask us