UAE Domestic Minimum Top-up Tax
Pillar Two, Made Practical for Your UAE Entities
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Introduction
The UAE now applies a 15% Domestic Minimum Top-up Tax (DMTT) to large multinational groups. For financial years starting on or after 1 January 2025, UAE entities of groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding years fall within scope. Keeping the top-up tax in the UAE means it is collected locally rather than by another country under the global Pillar Two rules.
DMTT sits alongside the 9% Corporate Tax but works very differently. It starts from accounting profit, applies its own adjustments and looks at the effective tax rate of all group entities in the UAE together. Getting it right depends on good data, a clear reading of the rules and close coordination with the group tax team.
At TSAC, we help UAE entities and their group tax teams turn these rules into a clear, repeatable process. We bring together UAE Corporate Tax, IFRS accounting and transfer pricing in a single team, so your DMTT position is accurate, well-documented and consistent with everything else you report.
// Our Services
1. Scoping & Impact Assessment
In-scope assessment
We confirm whether your group meets the revenue threshold and identify every UAE constituent entity, including free zone entities, permanent establishments, joint ventures and any excluded entities.
Effective tax rate modelling
We calculate your UAE jurisdictional effective tax rate and estimated top-up tax across several years and scenarios, so the finance team and the board know the likely numbers well in advance.
Safe harbour review
We test whether transitional safe harbours and simplified calculations are available. Where they apply, they can reduce the compliance effort considerably.
2. Data, Systems & Calculations
Data readiness
We map the data points the rules require to your ERP, consolidation packs and tax workings, close the gaps and set up a data collection template your team can reuse every year.
GloBE calculations
We prepare the full calculation: GloBE income or loss, the required adjustments, covered taxes, deferred tax and the substance-based income exclusion for payroll and tangible assets.
Interaction with UAE Corporate Tax
We show how your existing Corporate Tax position affects the top-up tax. That covers:
• Qualifying Free Zone Person status and the 0% rate
• Tax Groups and exempt income
• Corporate Tax elections and reliefs
• Deferred tax accounting and disclosures under IAS 12
3. Registration, Filing & Compliance
FTA registration
We handle top-up tax registration on EmaraTax, including the choice of the designated filing entity for the UAE.
Top-up tax return and GloBE Information Return
We prepare and file the UAE top-up tax return and coordinate the GloBE Information Return with your group, whether it is filed in the UAE or by the parent abroad.
Elections and documentation
We advise on the annual and multi-year elections available and maintain a clear audit trail from the financial statements to the final figures.
4. Structuring & Ongoing Advisory
Group structure review
We review holding, financing and free zone structures in light of the 15% minimum, and assess the Pillar Two effect of acquisitions, disposals and restructurings before they happen.
Group coordination
We work with your head office and other advisers so that the UAE position fits the group’s wider Pillar Two compliance and nothing is calculated twice.
Training and updates
We brief boards and finance teams on the rules and keep you up to date as UAE and OECD guidance develops.
Why TSAC
One team, complete view
Corporate Tax, IFRS, transfer pricing and Pillar Two work together, so your top-up tax figures reconcile with your financial statements and Corporate Tax return.
Practical and proportionate
We use safe harbours and simplifications wherever they are available, so the effort matches the outcome.
Built for repeat use
Our templates and workings are designed for your team to run year after year, not just to get through the first filing.
Partner-led engagement
Senior professionals lead your engagement from scoping to filing.
Discretion
Group financial data is handled with strict confidentiality.
How We Work
1. Scope
We confirm which UAE entities are in scope and agree timelines with you and your group tax team.
Model
We estimate your effective tax rate and top-up tax and test the available safe harbours.
Prepare
We gather and map the data, run the calculations and document each adjustment.
File
We register, prepare the returns and coordinate the GloBE Information Return.
Review
We refresh the model each year as your group, results and the rules change.
// FAQ's
Frequently Asked Questions
DMTT applies to UAE entities of multinational groups with consolidated revenue of EUR 750 million or more in at least two of the four preceding financial years. Standalone UAE businesses and smaller groups are not affected. We can confirm your position quickly.
If you are part of an in-scope group, yes. Income taxed at 0% lowers the UAE effective tax rate, which may result in top-up tax. We help you understand the impact and plan for it.
No. It is a separate tax with its own registration and return. It is calculated under the Pillar Two rules, starting from accounting profit, not from Corporate Tax taxable income.
The top-up tax return and GloBE Information Return are due 15 months after the end of the financial year, extended to 18 months for the first year. For a 31 December 2025 year end, the first filing is due by 30 June 2027.
Yes. DMTT is a UAE obligation. The UAE entities must register and file locally, even where the group prepares the GloBE Information Return centrally. We work with your head office so both sides use the same numbers.