The Ministry of Finance of the United Arab Emirates (UAE), through Cabinet Decision No. 142 of 2024, introduced the Domestic Minimum Top-up Tax (DMTT) applicable to in-scope multinational enterprise (MNE) groups for fiscal years commencing on or after 1 January 2025.

Aligned with the OECD’s Pillar Two framework, the DMTT aims to ensure that in-scope Multinational Entreprises (MNE) groups are subject to a minimum effective tax rate of 15% on the UAE profits, in accordance with the applicable rules.

Accordingly, Indian entities operating in the UAE through a subsidiary, Joint Venture etc., whether incorporated in the Free Zone or UAE Mainland, should assess their registration requirements under the UAE DMTT regulations.

Applicability

The UAE DMTT applies to UAE entities that are members of an MNE Group meeting the following criteria:

• Group Structure: The group includes at least one entity or permanent establishment located in a jurisdiction different from that of the Ultimate Parent Entity.
• Revenue Threshold: The group has annual consolidated revenue of at least EUR 750 million in at least two of the four fiscal years immediately preceding the relevant fiscal year.

Thus, Indian multinational corporations whose annual consolidated revenue (including their UAE operations) exceeds EUR 750 million, could be subject to UAE DMTT regulations.

Registration Requirements and Deadlines

Registration under the UAE DMTT regime is mandatory for all the UAE entities (whether incorporated in Free Zone or UAE Mainland) falling within its scope. The applicable registration requirements and deadlines are as follows:

• Transitional Registration Deadline: Under the transitional registration provisions, MNE Groups with a fiscal year ending before 30 April 2026 must complete their UAE DMTT registration by 30 November 2026.

• General Registration Deadline: Registration must be completed within seven months from the end of the first fiscal year in which the MNE Group falls within the scope of the UAE DMTT regime.

Action Point for Businesses: With the transitional registration deadline approaching, Indian businesses with a UAE presence such as a subsidiary, joint venture, branch office, permanent establishment etc. should promptly assess whether they fall within the scope of the UAE DMTT. Where applicable, the necessary steps should be initiated to ensure timely completion of registration within the prescribed timeframe, i.e., 30 November 2026.