UAE adopts OECD guidance on global minimum tax rules

Abu Dhabi: The UAE Ministry of Finance, on Wednesday, announced a significant step in its tax policy by formally adopting the latest guidance and commentary issued by the Organisation for Economic Co-operation and Development (OECD) on the Global Anti-Base Erosion (GloBE) Rules, also known as Pillar Two. This move was formalised through Ministerial Decision No. (88) of 2025, the Ministry said in a statement.

Implementing the Global Minimum Tax, a key component of Pillar Two seeks to establish a minimum 15 per cent tax rate for large multinational enterprises. By adopting the OECD's detailed guidance, the UAE provides clarity and certainty to businesses as it prepares to implement its domestic top-up tax regime. This move will enhance the UAE's reputation as a cooperative jurisdiction in international tax matters.

The decision follows the UAE Cabinet's earlier issuance of Decision No. (142) in 2024, which mandated a Top-up Tax on Multinational Enterprises (MNEs). Today's announcement signifies the UAE's ongoing commitment to aligning its tax framework with international standards and best practices established by the OECD's Inclusive Framework on Base Erosion and Profit Shifting (BEPS), of which the UAE is a member.

The Ministry also clarified that the newly adopted Ministerial Decision encompasses all administrative guidance and relevant commentary released by the OECD up to January 2025. This comprehensive adoption ensures that the UAE's Domestic Minimum Top-up Tax (DMTT) framework remains consistent with the OECD GloBE Model Rules. The Ministry anticipates that this alignment will ultimately reduce the compliance burden for multinational corporations operating within the UAE that fall under the scope of these rules.