UAE’s 15% Minimum Tax for Multinationals: Scope and Exemptions Explained
Amie Roberts • May 13, 2025
DMTT Scope & Exemptions Explained
Following our last article introducing the UAE’s 15% Domestic Minimum Top-Up Tax (DMTT)
for large multinational groups, this follow-up provides further information on which businesses fall within scope—and more importantly, which are exempt.
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What Is the DMTT?
To recap briefly, the Domestic Minimum Top-Up Tax is part of the UAE’s alignment with the OECD’s Pillar Two framework, ensuring that multinational groups pay a minimum effective tax rate of 15% in each jurisdiction where they operate. Rather than replacing existing UAE corporate tax, the DMTT works alongside it—applying only in cases where the effective rate falls below the global threshold.
What Has Been Clarified?
Exclusions for Smaller Entities
The DMTT only applies to MNE groups with global revenue exceeding €750 million. Standalone companies and smaller business groups remain unaffected.
No Retroactive Application
The tax will only apply from the 2025 financial year onwards, and assessments will not cover previous periods.
Treatment of Free Zone Income
While income from qualifying free zone activities may continue to enjoy a 0% rate, any income outside the scope of free zone benefits could still be subject to the DMTT.
Interaction With Existing UAE Corporate Tax
The standard 9% corporate tax introduced in June 2023 will continue to apply. The DMTT is designed to work alongside, not replace, the existing tax framework.
Implications for Business Planning
- Global Coordination: Multinational finance teams must now coordinate with UAE subsidiaries to ensure group-level compliance.
- Data Readiness: Companies need to gather and structure financial data across jurisdictions to meet reporting standards.
- Technology Upgrades: Tax reporting systems may need to be upgraded to handle the complexity of DMTT calculations and filings.
Practical Steps for UAE Businesses in Scope
For large international groups operating in the UAE, the DMTT introduces a new layer of tax planning and compliance obligations. Here’s what to focus on in the months ahead:
- Evaluate Group Revenue: Confirm whether your group exceeds the €750 million global threshold.
- Map UAE Operations: Identify all UAE-based entities and review their tax profiles, Free Zone status, and qualifying activities.
- Calculate Effective Tax Rate: Assess if your UAE operations will fall below the 15% threshold in 2025.
- Prepare for Reporting: Begin updating systems and processes to meet upcoming reporting and compliance requirements aligned with the OECD's global standards.
Should You Be Concerned if You’re Not an MNE?
For most UAE-based SMEs and family-owned firms, this tax will not apply.
However, if you are advising large groups or anticipate future growth to that level, it is worth understanding the new rules.
Conclusion
The additional guidance from the Ministry of Finance provides welcome clarity.
While many UAE-based businesses are outside the scope, those within should use the remainder of 2024 to prepare.
Our team can help you assess how the new rules apply and support your planning.
Get in touch today if your business or your clients operate as part of a global group.
The UK's non-dom tax regime has undergone one of its biggest overhauls in recent history—and the ripple effects are already being felt. With new rules kicking in from April 2025, the Government hoped for a revenue boost. Instead, it’s seeing an exodus of high-net-worth individuals. So, what’s really going on - and more importantly, what should you do about it? What Has Changed? Chancellor Rachel Reeves has scrapped the long-standing "non-dom" (non-domiciled) tax status. Under the new rules: Anyone living in the UK for more than four years will now pay UK tax on their worldwide income and gains. Inheritance tax will also apply globally for long-term residents. Transitional reliefs are being phased in, but the long-term direction is clear: the UK is no longer the tax haven it once was for international wealth. What’s the Impact? Far from delivering the forecasted £3 billion in annual revenue, the policy may actually cost the Treasury money. Why? More than 4,400 directors of UK businesses have already left in the past year. Up to 40% of non-doms are expected to follow. High-profile individuals - such as steel magnate Lakshmi Mittal - are reportedly eyeing exits. If even a quarter of non-doms leave, analysts suggest the government could lose £12 billion instead of gaining revenue. A Possible Policy U-Turn? Faced with this unexpected blowback, the Chancellor is now reconsidering parts of the policy: Inheritance tax rules for non-doms may be softened. A longer transition period for bringing overseas funds into the UK at reduced rates is on the table. New proposals are circulating, from tiered tax bands to repatriation incentives. Why This Matters to You If you're a non-dom, an international business owner, or someone with global assets tied to the UK, this is a crucial time to: Review your tax residency and exposure Reassess inheritance and estate planning Understand your options for relocating or restructuring wealth How Mosaic Chambers Group Can Help At Mosaic Chambers Group, we specialise in helping clients navigate precisely this kind of legal and fiscal uncertainty. Our team offers: Expert advice on UK tax residency and non-dom reforms Tailored inheritance tax planning International structuring solutions Ongoing support as the rules evolve Whether you're already planning a move abroad or simply looking to future-proof your wealth, we’re here to help you make confident, informed decisions. Final Thoughts The non-dom landscape is changing fast, and with more tweaks likely to come, staying ahead of the curve is essential. At Mosaic Chambers Group, we bring clarity to complexity - so you can focus on what matters most. Need advice or a personalised consultation? Get in touch with us today.
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