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The Federal Tax Authority issued its Top-up Tax Guide on Scope and Registration to assist multinational enterprise groups with compliance under legislation that applies to fiscal years beginning on or after January 1, 2025. The document focuses on helping groups assess whether they meet the criteria for the Qualified Domestic Minimum Top-up Tax while detailing the registration process and associated timelines for affected entities. It targets professionals responsible for the tax affairs of entities within such groups as well as tax agents who support them. The guide incorporates practical examples to demonstrate the application of rules to specific structures.
Under the rules an MNE group comes within scope when it records consolidated revenues of 750 million euros or more in the ultimate parent entity’s financial statements in at least two of the four fiscal years immediately preceding the tested year, according to the FTA guide. The assessment requires the group to have at least one entity or permanent establishment outside the jurisdiction of the ultimate parent entity. Gulf News reported that the QDMTT legislation follows the OECD GloBE Model Rules under Pillar Two of the global tax framework.
The guide sets out the categories of entities subject to the top-up tax as well as those excluded from its application. Permanent establishments, joint ventures, flow-through entities and hybrid entities receive dedicated explanations with illustrative scenarios to clarify their treatment. A related FTA document issued in August 2026 addresses excluded entities including governmental bodies, international organisations, non-profit organisations and certain pension funds in greater depth.
Registration for the top-up tax constitutes a distinct obligation from corporate tax registration and must be completed by all in-scope constituent entities located in the UAE. Entities whose first in-scope fiscal year ends before April 30, 2026, face a deadline of November 30, 2026, under FTA Decision No. 12 of 2026. All other cases require submission within seven months after the close of the initial fiscal year in which the entity enters scope.
The FTA guide further addresses the treatment of minority-owned constituent entities and stateless entities that qualify as reverse hybrids under UAE law. It confirms that registration can be performed directly by the relevant entity or through a designated local entity where permitted. Supporting materials within the document outline procedures for late registrations that may still take effect from the original due date in certain circumstances.
The UAE introduced the top-up tax through Cabinet Decision No. 142 of 2024 following amendments to the corporate tax law in 2023 to accommodate the regime. The Ministry of Finance subsequently issued Ministerial Decision No. 133 of 2026 clarifying filing responsibilities for Pillar Two information returns among constituent entities, joint ventures and specific hybrid structures. These steps form part of the country’s alignment with the OECD Inclusive Framework on Base Erosion and Profit Shifting.
