FTA issues Top-up Tax guide for multinational enterprises effective January 2025

The Federal Tax Authority has issued a new Top-up Tax Guide on Scope and Registration to help Multinational Enterprise (MNE) Groups understand the application of Top-up Tax in the UAE and their registration obligations.

The Guide explains how to determine whether an MNE Group falls within scope of the Qualified Domestic Minimum Top-up Tax (QDMTT) Legislation, outlines which entities are subject to Top-up Tax, and details the registration process and timelines. It includes practical explanations and examples covering different entity types, permanent establishments, joint ventures, flow-through entities, and hybrid entities.

The Top-up Tax applies to Constituent Entities located in the UAE that are members of an MNE Group with annual revenue of EUR 750 million or more (measured over at least two of the four preceding fiscal years). Groups conducting activities exclusively within the UAE are excluded, regardless of revenue.

UAE's QDMTT implementation is part of the OECD/G20 Two-Pillar Solution, which aims to ensure in-scope MNE Groups are subject to an effective tax rate of at least 15% in each jurisdiction where they operate. The UAE was listed with "transitional qualified" status on 18 August 2025, with the legislation applying to fiscal years beginning on or after 1 January 2025.