UAE 15% top-up tax (DMTT): who pays and when

The short answer

If your group has consolidated revenue of EUR 750 million or more in at least two of the four preceding fiscal years, its UAE entities pay a Domestic Minimum Top-up Tax (DMTT) for fiscal years starting on or after 1 January 2025. The tax lifts the group's effective tax rate in the UAE to 15%. It sits on top of the 9% Corporate Tax and is set out in Cabinet Decision No. 142 of 2024, made under Federal Decree-Law No. 60 of 2023.

Three dates matter now. Registration is separate from Corporate Tax registration and is due within seven months of the end of the first in-scope fiscal year. For fiscal years ending before 30 April 2026, which includes a calendar 2025 year, the FTA has set a transitional deadline of 30 November 2026. The first top-up tax return and payment are due 18 months after the end of the first year (30 June 2027 for a calendar 2025 year), and 15 months after year-end in later years.

Why UAE groups end up below 15%

• The headline Corporate Tax rate is 9%, already six points below the minimum.
• The first AED 375,000 of taxable income is taxed at 0%.
• A Qualifying Free Zone Person pays 0% on qualifying income. For a group in scope, that 0% is often exactly what the top-up tax collects.
• The calculation blends all UAE entities of the group together, so one low-taxed free zone company pulls down the rate for the whole UAE footprint.

How the top-up is calculated, in outline

The rules follow the OECD's Pillar Two (GloBE) model, and Ministerial Decision No. 96 of 2026 adopts the OECD Commentary for the UAE. In outline: add up the GloBE income of all the group's UAE entities, and the covered taxes they bear. The effective tax rate is covered taxes ÷ GloBE income. The top-up percentage is 15% minus that rate.

The top-up percentage is applied to excess profit, not to all profit. Excess profit is GloBE income less the substance-based income exclusion: a percentage of eligible payroll costs plus a percentage of the carrying value of tangible assets. The transitional percentages are 9.6% of payroll and 7.6% of tangible assets for years starting in 2025, and 9.4% and 7.4% for 2026. GloBE income and covered taxes start from the accounts but carry many adjustments, so treat any estimate as a first view. The top-up tax estimator runs the outline calculation.

Safe harbours that can bring the tax to zero

A safe harbour removes the tax, not the paperwork. The FTA's registration guide TTGREG1 says in-scope entities must register even when the top-up tax is zero.

• Transitional CbCR safe harbour: for fiscal years starting before 1 January 2027 (and ending by 30 June 2028), the UAE top-up tax is deemed zero if the group's qualified country-by-country report passes one of three tests: de minimis (UAE revenue under EUR 10 million and profit under EUR 1 million), simplified effective tax rate (at least 16% for 2025 and 17% for 2026), or routine profits (profit no more than the substance-based exclusion).
• Initial phase of international activity: zero for up to five years where the group operates in no more than six jurisdictions and holds no more than EUR 50 million of tangible assets outside its main jurisdiction, subject to conditions.
• Excluded entities: investment entities and qualifying governmental and sovereign entities are outside the charge.

Registration, returns and penalties

• Register on EmaraTax. A designated filing entity can register all the UAE entities it represents.
• Late registration costs AED 10,000 under Cabinet Decision No. 75 of 2023, and the FTA's guide applies it per entity.
• Top-up tax return and payment, in AED: 15 months after year-end, or 18 months for the first year in scope.
• Pillar Two information return: Ministerial Decision No. 133 of 2026 sets who files. A single designated local entity may file for all UAE entities. No UAE filing is needed where the parent files in a country with a qualifying exchange agreement with the UAE, but the UAE entities must notify the FTA of that filer.
• EY reads the Cabinet Decision as giving transitional relief from penalties on the returns for periods starting on or before 31 December 2026, where the group has taken reasonable measures.

Worked example

A European group with EUR 2 billion of revenue has three UAE entities: a mainland trading company, a free zone distribution hub and a services company. For 2025, their combined GloBE income is AED 400,000,000 and their covered taxes are AED 30,000,000. UAE effective tax rate: 30,000,000 ÷ 400,000,000 = 7.5%. Top-up percentage: 15% − 7.5% = 7.5%.

The UAE entities have eligible payroll of AED 50,000,000 and tangible assets of AED 200,000,000. Exclusion for 2025: 9.6% × 50,000,000 = AED 4,800,000, plus 7.6% × 200,000,000 = AED 15,200,000, total AED 20,000,000. Excess profit: 400,000,000 − 20,000,000 = AED 380,000,000. DMTT: 7.5% × 380,000,000 = AED 28,500,000, payable with the first return by 30 June 2027. The entities must register by 30 November 2026, whatever the final number.

How Hysaab applies this

The inputs that decide the exclusion, payroll by entity and the fixed asset register, are ledger data. Hysaab keeps each UAE entity's books, payroll and fixed assets in one place, so the figures your Pillar Two adviser or group tax team needs can be pulled by entity and by year, rather than rebuilt from spreadsheets.

Questions people actually ask

Keep reading

• Tool: UAE 15% top-up tax (DMTT) estimator
• Guide: Free zone 0% Corporate Tax: what a Qualifying Free Zone Person actually is
• Guide: Transfer pricing documentation in the UAE: who files what, and when
• Guide: UAE Corporate Tax penalties: what late registration, filing and payment actually cost
• Guide: Moving assets inside a UAE group without triggering tax: qualifying group relief and restructuring relief