The Ministry of Finance has released an updated version of its official guidance on the Domestic Minimum Top-up Tax. The update was published on 14 November 2025 and provides clearer direction for multinational enterprise groups that fall within the scope of the global minimum tax rules. This guidance is grounded in the UAE’s own legal framework for Pillar Two and the UAE implementing framework for OECD Pillar Two.
The Domestic Minimum Top-up Tax applies to Constituent Entities of multinational groups with global consolidated revenues of at least EUR 750 million. It is effective for financial years beginning on or after 1 January 2025 and forms part of the UAE’s ongoing alignment with the OECD Pillar Two framework. The regime is given effect in UAE law through Cabinet Decision No. 142 of 2024 concerning the Domestic Minimum Top up Tax and related implementing guidance issued by the Ministry of Finance.
Scope and Application
The updated guidance confirms the way in which the Domestic Minimum Top-up Tax will operate within the UAE tax system. It explains how in-scope groups should approach the calculation of their minimum effective tax rate and how the regime interacts with the wider global Anti-Base Erosion rules and with the UAE Corporate Tax system more generally. The publication reflects the UAE’s continued commitment to transparency and international cooperation in tax matters and to the introduction of a 15 percent (15%) minimum effective tax rate for in scope multinational group.
Practical Considerations
In-scope businesses are encouraged to begin reviewing their structures, financial information and reporting processes to determine their exposure to the regime. The complexity of the calculations means that early preparation is essential. Groups should ensure that internal teams and external advisers are aligned on data requirements, documentation and timing for upcoming filings including any new returns or notifications that may be prescribed for the Domestic Minimum Top up Tax. It will also be important to assess how existing corporate tax processes, finance systems and internal controls will support the additional data and computation requirements under the Domestic Minimum Top up Tax.
What this Means for Multinational Groups
The update signals that the UAE is moving steadily towards full implementation of the global minimum tax. Multinational groups with a presence in the UAE should now focus on readiness for the first compliance cycle in 2025. Strengthening internal controls, validating data sources and assessing the overall impact of the regime will help ensure a smooth transition and reduce the risk of last minute issues once the first Domestic Minimum Top up Tax calculations fall due. Groups that benefit from existing UAE tax incentives or free zone regimes should also consider how the Domestic Minimum Top up Tax may affect their overall effective tax rate and whether any restructuring or re alignment of activities is appropriate.
For tailored guidance on how these developments may shape your tax position or wider compliance strategy, our team would be pleased to guide you through the next steps. For tailored advice and practical solutions please contact Suneer Kumar, Head of Corporate Practice at suneer@alsuwaidi.ae and Vida Grace Serrano, Corporate Senior Associate at Vida@alsuwaidi.ae or Mamdouh Tawfik Associate at m.tawfik@alsuwaidi.ae