Finance
UAE Domestic Minimum Top-Up Tax (DMTT) — Understanding the Pillar Two Impact
15%
DMTT global minimum rate
EUR 750M+
Group revenue threshold
1 Jan 2025
UAE DMTT effective date
GloBE
Pillar Two framework applied
The UAE Domestic Minimum Top-Up Tax is the most technically complex development since the launch of Corporate Tax itself. It ensures that large MNE groups pay at least 15% effective tax rate on UAE income — collecting the top-up before another jurisdiction can.
Does the DMTT Apply to You?
Key Concepts
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Effective Tax Rate (ETR) — Calculated per jurisdiction. If UAE ETR falls below 15%, top-up tax applies on the shortfall
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Substance-Based Income Exclusion (SBIE) — Reduces income base by formulaic amounts linked to eligible payroll and tangible assets
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Transitional Safe Harbours — May simplify or eliminate top-up tax liability in qualifying periods
Client Case Illustration
A UAE subsidiary of a European MNE group was included in the Pillar Two scoping exercise. Univia modelled the ETR, applied the SBIE for eligible payroll and tangible assets, and confirmed the entity fell below the top-up threshold under the transitional safe harbour. A DMTT reporting calendar was established.
Contact Univia: info@univiaglobal.com | +971 50 223 5283
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