Multinational corporations doing business in the United Arab Emirates will soon be subject to a new tax. The minimum effective tax rate that large multinational corporations (MNEs) are required to pay on their profits is 15%. In an effort to create a transparent and equitable tax system that complies with international standards, the Ministry of Finance declared on Monday that the Domestic Minimum Top-up Tax (DMTT) will go into force for fiscal years beginning on or after January 1, 2025.
Multinational corporations operating in the United Arab Emirates that have consolidated worldwide revenues of €750 million (about Dh3 billion) or more in at least two of the four fiscal years prior to the fiscal year in which the DMTT is applicable will be subject to the DMTT, the Ministry further stated.
The Ministry of Finance will provide more information on this law as it becomes available.
As evidence of its dedication to national strategic goals like boosting economic competitiveness and facilitating business, the UAE keeps upgrading its business-friendly environment. This significant change aligns with the nation's pledge to adopt the Two-Pillar Solution of the Organization for Economic Co-operation and Development (OECD).
A refundable tax credit for high-value employment activity is another incentive under consideration. This seeks to incentivize companies to take part in ventures that yield substantial financial gains, foster innovation, and raise the UAE's standing in the world economy.
This incentive, which is intended to go into effect on January 2, 2025, will be given to employees who participate in high-value employment activities as a percentage of their qualified wage costs. This includes senior staff members, such as C-suite executives, carrying out essential commercial tasks that significantly boost the UAE economy.
