UAE Introduces Domestic Minimum Top-up Tax and Proposes New Corporate Tax Incentives

UAE, 17 January, 2025 : The UAE Ministry of Finance has introduced key updates to Federal Decree-Law No. 47 of 2022, including a Domestic Minimum Top-up Tax (DMTT) and proposed corporate tax incentives to drive growth and innovation.

Introduction of DMTT
Effective from 1 January 2025, the DMTT aligns with the OECD’s Two-Pillar Solution, ensuring multinational enterprises (MNEs) with global revenues of €750 million or more pay a minimum effective tax rate of 15%. This reflects the UAE’s commitment to global tax standards.

Corporate Tax Incentives
The Ministry is considering new incentives to promote economic growth:

• R&D Tax Incentive: Offering a 30-50% refundable tax credit for qualifying UAE-based R&D activities. Expected implementation: 1 January 2026.
• High-Value Employment Tax Credit: Refundable credits for eligible salary costs of C-suite executives and senior personnel in high-value roles. Proposed start: 1 January 2025.

Final implementation of these incentives is subject to legislative approvals, with further guidance to be provided by the Ministry.