Recognition granted by OECD for UAE's implementation of country's domestic minimum top-up tax
The United Arab Emirates (UAE) has made a significant stride in its commitment to international tax standards, as the Organisation for Economic Co-operation and Development (OECD) has officially recognised the UAE's Domestic Minimum Top-up Tax (DMTT) under the OECD Pillar 2 safe harbor.
This recognition strengthens the UAE's position as a leading global hub for business and investment. The qualification further reinforces the UAE's attractiveness as a destination for global investment, and it is expected to ease compliance for multinational enterprise (MNE) groups operating in the UAE.
The UAE Ministry of Finance stated that this move aligns with the nation's sustainable development agenda. The minister, from the Ministry of Finance of the United Arab Emirates, announced the OECD recognition status of the UAE Domestic Minimum Top-up Tax on August 25, 2025. However, the exact name of the minister was not specified in the available sources as of August 2025.
With the OECD's qualified status, foreign tax will not be imposed on UAE profits for MNE groups. Instead, top-up tax liabilities for MNE groups will be accepted in the UAE. This reduces the risk of multilateral audit disputes for MNE groups operating in the UAE, providing certainty for these businesses.
The qualification for the OECD Pillar 2 safe harbor removes the need for top-up calculations in other jurisdictions for entities based in the UAE. This is a significant step towards international tax compliance for the UAE, further aligning with the nation's sustainable development agenda.
The OECD's qualified status for the UAE's DMTT provides additional clarity and stability for businesses operating in the UAE. The UAE's commitment to international tax standards, as demonstrated by previous OECD recognitions, underscores the country's dedication to fostering a business-friendly environment that encourages investment and growth.
The UAE's DMTT was published on the OECD's Central Record of Legislation with Transitional Qualified Status, marking another milestone in the country's journey towards global tax compliance. This recognition is expected to reinforce the UAE's position as a leading global hub for business and investment, attracting more foreign investment and bolstering the nation's economy.
