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UAE 15% minimum tax 2025

The UAE will impose a 15% minimum tax on businesses by 2025.

Starting January 1, 2025, the UAE will roll out a Domestic Minimum Top-up Tax (DMTT), aimed at large multinational corporations (MNEs). This new tax ensures that these companies pay at least a 15% effective tax rate on their profits, in line with global tax norms. The DMTT will apply to multinationals with annual global revenues over €750 million (roughly AED 3 billion) in at least two of the four fiscal years leading up to its launch. The UAE’s Ministry of Finance will release more info on the new rules soon, but for now, keep reading for everything we know so far.

Why This Change Coming To UAE?

The UAE is aligning with the OECD’s Two-Pillar Solution, a global framework aimed at making corporate taxation more equitable. These tax changes are also in line with the UAE’s broader strategy to boost its economic competitiveness and create a business-friendly environment. By rolling out fairer tax policies, the UAE seeks to strike a balance between attracting global investments and meeting international standards.

Incentives to Drive Innovation & Growth
Fostering High-Impact Roles

Starting January 2025, businesses will be able to take advantage of a new tax incentive aimed at supporting high-value employment.

  1. How It Works: Companies can claim a refundable tax credit on the salaries of senior executives and key staff involved in critical business functions that contribute significantly to the UAE’s economic growth.
  2. Why It Matters: This initiative is designed to attract top-tier talent and boost the UAE’s position as a global hub for innovation and leadership.

Boosting Research & Development (R&D)

To further drive innovation, the UAE will launch an R&D tax incentive in 2026. This initiative is designed to fuel research-driven economic growth by offering substantial tax benefits to businesses.

  1. Benefits: Companies can claim a refundable tax credit ranging from 30% to 50% on eligible R&D expenses, depending on their size and revenue.
  2. Eligible Activities: Only R&D activities carried out within the UAE and in line with international standards (as outlined in the OECD’s Frascati Manual) will be eligible for the credit.

With more updates on the way, businesses can get ready for a new wave of growth and opportunities in the UAE. Stay connected with Gulf Buzz to stay on top of the latest developments as these changes unfold.

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