The United Arab Emirates (UAE) is set to implement a 15% minimum top-up tax on large multinational corporations starting from January 2025. This move aligns the UAE with global tax reforms and aims to bolster non-oil revenue.

The Domestic Minimum Top-up Tax (DMTT) is part of the OECD’s global minimum corporate tax agreement, which seeks to address tax avoidance and ensure a minimum 15% tax rate on multinational corporations with global revenues exceeding $789.5 million in at least two of the four financial years preceding its implementation.

“The UAE has shifted from a tax haven to a low-tax jurisdiction with the introduction of a 9 percent corporate tax rate in 2023,” said Bal Krishen, chairman of Century Group.

The DMTT forms part of the OECD’s “Two-Pillar Solution,” which mandates that multinational enterprises pay a 15% minimum effective tax rate on profits earned in every country where they operate.

“This move aims to create a fair tax system and boost revenues for economic diversification beyond oil,” Krishen added.

The Finance Ministry also revealed plans for additional corporate tax incentives, including a research and development (R&D) incentive set to launch in 2026. This program could offer a refundable tax credit of 30% to 50%, depending on the size and revenue of the company.

Another proposed incentive would provide refundable tax credits for high-value employment activities, based on eligible employee income costs. This could come into effect as early as January 2025.

Both measures remain subject to legislative approval.