The United Arab Emirates will impose a minimum additional tax of 15% on large multinationals from January

• DMTT part of the OECD Global Minimum Corporate Tax Agreement.
• The UAE is considering introducing corporate tax incentives.
• The incentive will offer a refundable tax credit of up to 50%.

DUBAI: The United Arab Emirates will impose a 15% minimum supplementary tax (DMTT) on large multinational companies operating in the country from January, the finance ministry said on Monday, as the government seeks to boost non-oil revenue.

The DMTT is part of the OECD’s global minimum corporate tax agreement, which has 136 signatories, including the UAE, to ensure large companies pay at least 15% and make tax avoidance harder.

In amendments to the corporate tax law, the UAE finance ministry said the DMTT will apply to companies with consolidated worldwide revenues of 750 million euros ($793.50 million) or more in at least two of the four financial years preceding those in which the tax takes effect.

The UAE, including Dubai, is a hub for multinationals in the Middle East and the tax changes come a year after the UAE began implementing a 9% business tax, with exemptions for the many free zones that fuel its economy.

The DMTT falls under the Organization for Economic Co-operation and Development’s (OECD) Two-Pillar Solution, which stipulates that large multinational enterprises pay a minimum effective tax rate of 15% on profits in each country where they operate.

The UAE finance ministry said it is also considering introducing some corporate tax incentives, including one for research and development (R&D) that will apply to tax periods starting in 2026.

The cost-based incentive will offer a potential 30%-50% tax credit that is refundable depending on the size of the company’s operations in the UAE and revenue, the ministry added.

Also under consideration is a refundable tax credit for high-value employment activities that would be granted to companies as a percentage of eligible employee income expenses and could be implemented as early as January 1, 2025, the ministry said.

Such proposed incentives are still subject to legislative approval.

($1 = 0.9452 euros)