Domestic minimum top-up tax (DMTT) compliance guide: does it apply to you?

Domestic minimum top-up tax (DMTT) in the UAE is a 15% minimum effective tax rate rule for large multinational groups. If your group did not report at least €750 million in consolidated revenue in two of the four preceding financial years, you are generally outside its scope. Check the group's consolidated accounts, rather than your UAE company's turnover.

If you are in scope, here is what to register, when to file, and how the UAE DMTT calculation works. Your existing corporate tax obligations continue separately, including any corporate tax planning in the UAE.

What is the domestic minimum top-up tax?

UAE DMTT applies when an in-scope multinational group's effective tax rate on its UAE profits falls below 15%. It follows the OECD's global minimum tax framework, known as Pillar Two.

Under Cabinet Decision No. 142 of 2024, DMTT applies to financial years starting on or after 1 January 2025. It sits alongside ordinary UAE corporate tax, whose standard rate is 9%. See the UAE corporate tax reform timeline for that separate tax.

The 15% figure is an effective rate under Pillar Two rules, rather than a flat rate on every UAE company.

Does UAE DMTT apply to you?

Check whether your multinational group had €750 million or more in consolidated revenue in at least two of the four preceding financial years. Then confirm whether your UAE entity falls within the FTA’s DMTT scope.

Mergers, short years, and joint ventures can change the answer. If your group is near the threshold, get four years of consolidated revenue figures and confirm which UAE entities are covered.

When does DMTT start, and what must you file?

Three separate deadlines apply to DMTT compliance: registration, the top-up tax return, and, where required, the Pillar Two Information Return.

• DMTT registration must generally be completed within seven months of the first in-scope financial year-end under FTA Decision No. 12 of 2026. For years ending before 30 April 2026, the transitional deadline is 30 November 2026.
• The top-up tax return is generally due within 18 months of the first transition-year end and 15 months thereafter under Cabinet Decision No. 142 of 2024. For a 31 December 2025 year-end, this means 30 June 2027.
• The Pillar Two Information Return applies where required under Ministerial Decision No. 133 of 2026. A qualifying filing outside the UAE may remove the UAE filing requirement, subject to notifying the FTA of the filer and filing location.

Your regular Corporate Tax return has a separate deadline. See Alaan’s guides on the Corporate Tax return filing deadline and documents required for Corporate Tax filing. Expense records support tax reporting, but they do not calculate DMTT.

How is the top-up tax calculated?

Start with the UAE-wide effective tax rate by dividing adjusted covered taxes by net Pillar Two income. If it is below 15%, the difference is the top-up percentage. Subtract the substance-based income exclusion from net Pillar Two income to calculate excess profit, then apply the top-up percentage, subject to applicable adjustments and reliefs.

For a 2025 tax year, the transitional rates are 9.6% of eligible payroll and 7.6% of eligible tangible assets.

Here’s a simplified 2025 example, assuming one UAE entity, no additional current top-up tax, and no applicable safe harbour:

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The exclusion reduces excess profit, so the result is below 6% of AED 10 million. Actual calculations can involve multiple entities, adjustments, and safe harbours. Alaan's corporate tax calculator estimates ordinary corporate tax; it does not calculate DMTT.

What if your company is in a free zone?

A qualifying free zone person's 0% corporate tax treatment does not automatically exempt it from DMTT. If its multinational group passes the group revenue test, assess the free zone entity under the DMTT rules.

The ordinary 0% corporate tax rate depends on qualifying free zone person status. A 0% rate does not automatically mean DMTT is payable either: test the UAE-wide calculation and available reliefs.

What happens if you get it wrong?

Missing registration or filing can lead to assessments and administrative penalties. Article 14 of Cabinet Decision No. 142 of 2024 applies relevant assessment, penalty, and record-keeping provisions. Do not assume the late ordinary corporate tax registration penalty is the DMTT penalty.

Document your scope decision and assign registration, filing, and data ownership. Payroll figures are easier to check before the return is due.

Alaan's accounting automation syncs card expenses with your accounting software and suggests categories and tax codes, helping keep the underlying books current. Your finance and tax teams should still assess DMTT scope and calculate any top-up tax under the Pillar Two rules.

FAQs

What is DMTT tax in the UAE?

It is a domestic top-up tax designed to bring the effective tax rate on relevant UAE profits of an in-scope multinational group toward the 15% minimum. It sits alongside ordinary UAE corporate tax.

When is UAE DMTT registration due?

Registration is due within seven months after the first in-scope financial year ends. Under the transitional rule, if that year ended before 30 April 2026, registration is due 30 November 2026.

How do you calculate UAE DMTT?

Work out the UAE effective rate using adjusted covered taxes and net Pillar Two income. If it is below 15%, apply the difference to excess profit after the eligible payroll and tangible asset exclusion, then account for any other adjustments or reliefs. The worked example above shows the basic arithmetic.

How does DMTT relate to the global minimum tax rules?

Pillar Two sets the wider 15% framework; UAE DMTT lets the UAE collect top-up tax on relevant UAE profits. David Daly, partner at Gulf Tax Accounting Group, described the UAE's OECD recognition of its rules as a sign that it is “trading internationally fairly.” For your finance team, the immediate job is the UAE registration and return, even if the parent company handles other Pillar Two filings.