ع
The Ministry of Finance released Ministerial Decision No. 133 of 2026 to identify the UAE-based entities required to submit a Pillar Two Information Return as part of the framework established by Cabinet Decision No. 142 of 2024. These entities include each constituent entity located in the UAE with the exception of investment entities. The decision also encompasses each joint venture and joint venture subsidiary situated in the UAE as well as any stateless constituent entity that qualifies as a reverse hybrid entity formed under UAE laws according to the ministry’s announcement.
Filing obligations can be met directly by the constituent entity joint venture or joint venture subsidiary the Ministry of Finance stated in the decision. A designated local entity holds the option to submit the return on behalf of qualifying parties. The provisions take effect for fiscal years commencing on or after January 1 2025 and supplement earlier guidance on the top-up tax framework.
Cabinet Decision No. 142 of 2024 introduced the top-up tax to establish a minimum effective rate of 15 per cent for large multinational enterprises operating in the UAE the Ministry of Finance reported. The tax applies to constituent entities of groups whose consolidated annual revenue equals or exceeds 750 million euros in at least two of the four fiscal years immediately preceding the tested year according to the cabinet resolution. This implementation follows the OECD model rules under the Global Anti-Base Erosion framework an OECD publication on tax challenges from digitalisation of the economy confirmed.
The Federal Tax Authority issued Decision No. 12 of 2026 in July that sets registration and deregistration timelines for entities subject to the top-up tax the authority’s documentation shows. Affected entities must generally apply for registration within seven months after the close of their first in-scope fiscal year though transitional deadlines apply for fiscal years ending before April 30 2026. Deregistration follows defined triggers including cessation of existence or departure from an in-scope multinational group.
Calculation of any top-up tax requires determining a jurisdictional effective tax rate by dividing adjusted covered taxes by Pillar Two income for the UAE entities the cabinet decision outlines. A top-up payment arises where that rate falls below 15 per cent after application of substance-based income exclusions. Qualifying free zone persons taxed at zero per cent on qualifying income fall within the top-up tax computation when they belong to an in-scope multinational group according to analyses from tax advisory firms including Kayrouz and Associates.
Ministerial Decision No. 96 of 2026 adopted updated OECD commentary and administrative guidance for consistent application of the top-up tax rules the Ministry of Finance indicated in June. That guidance replaced an earlier ministerial decision and applies to the same fiscal years starting on or after January 1 2025. The sequence of decisions provides multinational groups with progressively detailed compliance requirements as the first information returns become due.
