Understanding the UAE's DMTT
A practical guide to Pillar Two. Scope, the calculation mechanic, safe harbours, and the specific issues facing Free Zone (QFZP) companies — all in practical terms.
effective tax rate
threshold
financial year
ministerial guidance
The Question This Report Addresses
For financial years beginning on or after 1 January 2025, the UAE introduced its own top-up tax under OECD Pillar Two — the Domestic Minimum Top-up Tax (DMTT). The UAE's 0% Free Zone regime and 9% mainland Corporate Tax are recognised, as-is, as the "effective tax rate" under OECD calculations. A 0% UAE Corporate Tax outcome reads as a 0% ETR for GloBE purposes, and the gap to 15% can be collected as DMTT.
"QFZP status" does not mean "exempt from DMTT" — that is the single most important message of this report. It covers scope, the calculation mechanic, safe harbours, and the specific issues facing Free Zone (QFZP) companies, all in practical terms.
Principal Conclusions
Groups with consolidated revenue of €750m or more. Tested at the Ultimate Parent Entity (UPE) level, not the individual UAE entity.
ETR is recalculated separately under OECD GloBE methodology, apart from UAE CT. If it falls below 15%, DMTT collects the difference.
QFZP status only sets Corporate Tax to 0%. There is no DMTT carve-out — the two are entirely independent tests.
The Transitional CbCR Safe Harbour is the mechanism most likely to actually shelter a group in the early years.
Things to Do Now (Extract)
The report closes with a 6-item checklist of what to do now.
| Area | Action |
|---|---|
| Applicability | Confirm whether your Group meets the €750m threshold in 2 of the last 4 years — test at UPE level |
| ETR modelling | Model the UAE blended ETR using GloBE methodology, not just your UAE CT return |
| Safe harbours | Assess whether the Transitional CbCR Safe Harbour is available and beneficial for your first transitional year |
What the Report Covers
- The Question This Report Addresses / Key Findings
- Glossary of Key Terms (OECD, GloBE, ETR, QDMTT, SBIE, UPE, MOCE, and more)
- Background to the UAE's DMTT / Legal Basis and Timeline
- Who's In Scope (Threshold & Entities) / What Changed in 2026
- How the Top-Up Is Actually Calculated, and SBIE
- Safe Harbour #1: Transitional CbCR Safe Harbour (three gateway tests)
- Safe Harbours #2–4: Simplified Calculations, Initial Phase Exclusion, Transitional Penalty Relief
- Filing Obligations, EmaraTax Registration, and the Data Burden
- Two Layers: CT & Free Zone Interaction / The QFZP General Point
- Key Issues for QFZP Companies / Worked Example / Incentive Interaction
- FAQ (6 Questions) + 6 Things to Do Now
- How Biz Easy Supports You / Contact
What Changed in 2026
Ministerial Decision No. 96 of 2026 (issued 22 June 2026) has further clarified how the UAE DMTT regime operates.
| Item | Detail |
|---|---|
| Latest guidance | Adopts the OECD 2026 Consolidated Commentary and Administrative Guidance, repealing Ministerial Decision No. 88 of 2025 |
| EmaraTax registration | The FTA has opened Pillar Two Top-Up Tax registration on the EmaraTax portal — in-scope groups can, and should, register now |
| What stays the same | Legal basis, the €750 million threshold, the 15% floor, and the effective date (FYs beginning on or after 1 January 2025) |
Access the full report
Download the complete 14-page PDF, including the full breakdown of scope, the calculation mechanic, safe harbours, QFZP issues, FAQ, and checklist.
Methodology
This report was prepared by Biz Easy FZCO's Tax Advisory team, drawing on experience from over 200 client engagements across the UAE. It is based on Biz Easy's seminar "UAE Domestic Minimum Top-Up Tax (DMTT)" (28 July 2026).
Contact: Tax & Accounting Advisory｜info@bizeasy.co
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View All White PapersThis document has been prepared for general informational purposes and does not constitute tax advice. Information is current as of July 2026 and may be subject to change without notice. DMTT and Pillar Two remain a fast-moving area with frequent regulatory and guidance updates — please verify current FTA and Ministry of Finance guidance before making any decision. The worked example is illustrative and generalised.
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