New tax regulations have been applied in the UAE: Do they affect your business?
The UAE Top-Up Tax registration is now available on the Federal Tax Authority (FTA)’s EmaraTax portal. This is a key milestone in the country’s implementation of the OECD’s 15% Global Minimum Tax under Pillar Two. This update indicates that large multinational groups operating in the UAE need to start preparing for compliance, assessments, and reporting obligations.
As global tax reforms accelerate, the UAE’s introduction of the Domestic Minimum Top-Up Tax (DMTT) is consistent with international standards and enhances transparency in multinational structures. The EmaraTax Top-Up Tax registration function is a clear call-to-action for CFOs and tax directors to prepare for the process.
This article explains the Top-Up Tax rule, who might be impacted, and what steps should be taken in this regard.
What Is the UAE Top-Up Tax?
The UAE Top-Up Tax is a component of the OECD’s Pillar Two framework, which seeks to establish a minimum effective tax rate of 15% for large multinational enterprise (MNE) groups in each jurisdiction they operate in.
The Domestic Minimum Top-Up Tax is part of UAE Cabinet Decision No. 142 of 2024, and applies when the effective tax rate of an MNE in the UAE is below 15%, which then results in a “top-up” to meet the global minimum.
This is fully in line with the OECD Global Anti-Base Erosion (GloBE) Model Rules and the administrative guidance adopted by the UAE Ministry of Finance.
Who Is Impacted? Understanding the €750 Million Threshold
The Top-Up Tax only applies to large multinational groups, meaning that small and medium-sized enterprises (SMEs) are not affected.
A group must meet the following criteria to be in-scope:
- Annual consolidated global revenue of at least EUR 750 million in two of the last four fiscal years.
- Must be part of an MNE group with entities or permanent establishments in more than one jurisdiction.
- Includes a headquarters that is based in the UAE or a foreign-based headquarter but still operating within the UAE.
This threshold is in line with the OECD Pillar Two rules and has been reiterated in a number of announcements published by the UAE tax authority.
If the relevant group does not exceed the €750 million tax threshold, the UAE Top-Up Tax will not apply.
Why the EmaraTax Top-Up Tax Portal Matters Now
Now that the Top-Up Tax registration is live on EmaraTax, in-scope MNEs should begin preparations for compliance. This includes:
- Registration of all UAE constituent entities
- Measuring effective tax rates
- GloBE Information Return preparation
- Data preparation for reporting cycles
The GloBE Information Return follows the OECD’s standardized template, adopted in the UAE under Ministerial Decision No. 88 of 2025.
The DMTT will apply from 1 January 2025 for financial years starting on or after that date, so the first compliance cycle has already started.
While the EmaraTax registration function is now live, the FTA has not yet published the registration deadline itself — further guidance on timelines and procedures is expected. What is already confirmed is the filing timeline: in-scope entities must submit their Top-Up Tax Return within 15 months of the end of the relevant tax period (18 months for the transitional first year), meaning a group with a 31 December 2025 year-end has its first return due by 30 June 2027. A transitional penalty relief also applies: no penalties will be imposed for late filing of the Top-Up Tax Return or the GloBE Information Return for fiscal periods beginning on or before 31 December 2026, provided the group has taken reasonable measures to apply the rules correctly.
Next Steps for In-Scope Multinational Groups
This is a step-by-step guide for CFOs and tax leaders to prepare for UAE Top-Up Tax compliance.
1. Pillar Two Applicability Check
Find out if your group has a consolidated revenue above the €750 million tax threshold in two out of the last four financial years.
2. Evaluate Effective Tax Rate of UAE
Identify the jurisdictional effective tax rate, and then estimate possible top-up exposure under the 15% minimum.
3. Identify UAE Constituent Entities
Identify all UAE entities, permanent establishments, and joint ventures that fall within the GloBE definition.
4. Collect Required Financial Information
Gather consolidated financial statements, entity-level information, and GloBE-specific disclosures needed for compliance.
5. Register on EmaraTax
Decide at group level whether to appoint a Domestic Designated Filing Entity (DDFE) to register and file on behalf of all UAE group members, or have each entity register individually. Complete the UAE Top-Up Tax registration for all in-scope entities via EmaraTax, and monitor FTA announcements for the registration deadline, which has not yet been published.
6. Create a Compliance Framework
Establish internal processes for reporting, documentation, and ongoing monitoring of Pillar Two obligations.
Act Now for Full Compliance
The launch of the UAE Top-Up Tax registration on EmaraTax is a significant milestone for multinational groups operating within the UAE. With the 15% UAE global minimum tax now in effect, and reporting cycles on the horizon, CFOs and tax leaders need to take proactive steps to assess exposure, prepare data, and complete registration.
Corporate Tax UAE expert team helps MNEs with:
- Impact assessments of Pillar Two
- DMTT modeling and ETR calculations
- FTA registration
- Reporting readiness and compliance frameworks
- Global Minimum Tax requirements of the UAE
Contact us for a full understanding of Top-Up Tax registration and ensure your company’s records are fully compliant.
