UAE to impose 15% minimum top-up tax on large multinationals from Jan ‘25

SINGAPORE (ICIS)–The UAE will impose a minimum top-up tax (DMTT) on large multinational companies, to align its tax system to global standards.

The DMTT, which will take effect for financial years beginning on or after 1 January 2025, is a component of the OECD’s global minimum corporate tax agreement signed by 136 countries, including the UAE, the country’s Ministry of Finance said on 9 December.

OECD is a group of industrialized economies with 38 members. (Note: ICIS doesn’t spell out OECD)

The new tax will apply to multinational enterprises operating in the UAE with consolidated global revenues of at least €750 million in the past two years, the ministry said.

Small petrochemical converters and traders in the UAE are not expected to be affected by the new tax.

These tax amendments follow a 9% business tax implemented in 2023, with exemptions for special free zones that operate under different laws.

Alongside the DMTT, tax incentives for research and development (R&D) as well as a refundable tax credit for “high-value employment activities” will also be introduced, the ministry said.

The R&D tax incentive, beginning 1 January 2026, will offer a potential 30-50% tax credit, while the high-value employment tax incentive will, from 1 January 2025, be “granted as a percentage of eligible salary costs” for eligible employees, including C (chief)-suite executives.

The initiatives aim to “enhance the UAE’s global competitiveness” as well as spur innovation and growth, the ministry said.

Additional reporting by Nadim Salamoun