The UAE Ministry of Finance (MoF) announced that it had launched a public consultation regarding the enforcement of the Pillar 2 Global Minimum Tax (GloBE) Rules. The objective of this consultation is to gather the views of stakeholders with respect to the potential policy design options to respond to the implementation of the GloBE Rules worldwide.
Pillar Two (GloBE Rules) or the Global Minimum Tax targets MNE Groups with annual consolidated revenue of or above EUR 750 million. Broadly, it ensures that these Multinational Enterprises (MNEs) pay a minimum tax of 15% with respect to the Excess Profits derived from every jurisdiction they operate through two interlocking rules, the Income Inclusion Rule (IIR) and the Under Tax Profits Rule (UTPR), which are together referred to as the global anti-base erosion rules or GloBE Rules.
Public submission will help inform the UAE Ministry of Finance on aspects such as domestic implementation issues, such as interactions with the UAE’s corporate tax system, and ways to minimize compliance costs while exploring the policy options for potential implementation of the GloBE Rules.
The public consultation questionnaire covers the following areas:
- Pillar Two implementation in the UAE – covering GloBE implementation, the design of a potential UAE DMTT and administration matters;
- Substance-based incentives
Alongside the consultation questionnaire, a separate Guidance Paper has been prepared, which provides details on the specific aspects of the GloBE Model Rules. The information provided in this Consultation Paper does not constitute tax, legal or any other professional advice. The deadline to receive comments is 10 April 2024.
On 13 September 2023, the UAE, in cooperation with the Organisation for Economic Co-operation and Development (OECD), hosted the Pillar Two Regional Forum related to the Global Minimum Tax of Base Erosion and Profit Shifting (BEPS) and the Global Anti-Base Erosion Rules (GloBE). During this forum, the UAE officially announced its decision not to implement the Global Minimum Tax rule before 2025.
