The UAE's Domestic Minimum Top-up Tax — does it actually affect my business?
I keep hearing about a new 'DMTT' tax in the UAE — does that mean my company's tax bill is about to go up?
In 2021, more than 140 countries — including the UAE — agreed to a global framework known as OECD Pillar Two, aimed at ensuring large multinational groups pay an effective tax rate of at least 15% on their profits in every country they operate in, closing the door on shifting profits to zero- or near-zero-tax jurisdictions. The UAE implemented part of this agreement through what's known as the Domestic Minimum Top-up Tax, or DMTT.
The DMTT took effect on 1 January 2025, and applies only to entities that are part of a multinational group whose consolidated global revenue reached or exceeded EUR 750 million in at least 2 of the preceding 4 financial years. If a group falls within that scope, any of its UAE entities can be required to pay a top-up amount that brings its effective UAE tax rate up to 15% — even if that entity was otherwise benefiting from an exemption or a 0% rate.
It's important to understand that the DMTT does not replace the standard 9% Corporate Tax — it sits alongside the regular regime, and only kicks in when an entity's effective UAE rate falls below 15% (for example, because it benefits from the Free Zone 0% regime). In that case, only the gap between the actual effective rate and 15% gets collected as the top-up — not the entity's entire tax liability from scratch.
Here's what matters most for the vast majority of UAE business owners: the DMTT has nothing to do with them at all. Small and mid-sized businesses, family enterprises, and even mid-sized groups whose global revenue is nowhere near the EUR 750 million threshold fall entirely outside its scope, and remain governed only by the standard 9% Corporate Tax law and the Free Zone regime as applicable to them.
Why is it still worth knowing about, even if you're unaffected? Because you might be a supplier or partner in a chain that includes a group that is in scope, and it helps to understand how their tax teams think and what they'll be asking about. At RASEEKH, we help clients quickly tell the difference between those who genuinely need to track Pillar Two and DMTT developments, and those whose real priority is still getting their standard 9% tax file in order.