UAE Corporate Tax: Do You Fall Under the 15% Top-Up in 2025?

1. The UAE has officially introduced a Domestic Minimum Top-up Tax effective from 1 January 2025. This move aligns with the OECD’s Global Minimum Tax (Pillar Two framework) and ensures that large multinational groups pay at least 15% corporate tax in the UAE.

   But the big question for many businesses is: Does this new 15% top-up apply to you?

   Who is Affected?

   The 15% corporate tax top-up only applies to:

   • Multinational Enterprise (MNE) Groups with global revenues of EUR 750 million (approx. AED 3 billion) or more in at least two of the previous four years.

   • Groups that already fall under the OECD Pillar Two rules internationally.

   If your business is a small or medium-sized company, this new rate does not apply to you. You remain under the UAE’s standard corporate tax regime:

   • 0% on taxable income up to AED 375,000

   • 9% on taxable income above AED 375,000

   Why Was This Introduced?

   The UAE introduced the 15% top-up to:

   • Comply with OECD’s Global Anti-Base Erosion (GloBE) rules

   • Protect the UAE’s tax competitiveness while meeting international standards

   • Ensure large MNEs contribute fairly, while keeping the UAE attractive for SMEs and investors

   Impact on Free Zone Companies

   Free Zone entities that are part of a large MNE group may also be impacted. While qualifying income can still enjoy a 0% rate, the top-up ensures the effective tax is at least 15% for covered groups.

   What Should Businesses Do Now?

   • Assess your group structure: Are you part of an MNE group that crosses the revenue threshold?

   • Review financial statements: Check consolidated revenues for the last four years.

   • Plan for reporting: The Federal Tax Authority (FTA) will release detailed compliance and filing requirements.

   • Seek expert advice: Proper planning can minimize risks and ensure smooth compliance.

   Finalancers Can Help

   At Finalancers, we specialize in corporate tax advisory, compliance, and planning for businesses across the UAE and wider region. Whether you’re a multinational group or a local SME, we ensure you stay compliant while optimizing your tax position.

   📞 Contact us today at info@finalancers.ae or +971 58 858 7838 for tailored advice on how the 2025 corporate tax changes may affect your business..
   

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