The move replaces the previous framework, incorporates the OECD's Side-by-Side package, and introduces revised safe harbour provisions that could affect multinational groups and the treatment of UAE tax incentives. 

RF Report

The UAE issued Ministerial Decision No. 96 of 2026 (MD 96/2026), on 22 June 2026, which formally adopts the most recent OECD interpretive materials for the UAE’s Qualified Domestic Minimum Top-up Tax (QDMTT) regime.

It specifically adopts three main OECD packages: the 2026 Consolidated Commentary on the GloBE Model Rules, the 2026 Administrative Guidance/Central Record for the Global Minimum Tax, and the January 2025 GloBE Information Return.

The decision applies to fiscal years beginning on or after 1 January 2025 and became effective upon its date of issuance.

The repeal of MD 88/2025

A major component of MD 96/2026 is the explicit repeal of the prior legislation, Ministerial Decision No. 88 of 2025. Consequently, multinational groups that have already prepared 2025 UAE domestic minimum top-up tax models, accounting provisions, safe harbour analyses, or governance papers based on the older adopted OECD materials will need to refresh their positions to align with the new guidance.

Incorporation of the OECD side-by-side package

By adopting the 2026 Consolidated Commentary and Administrative Guidance, the UAE has effectively updated its Pillar Two interpretive framework to include the OECD’s January 2026 Side-by-Side package. This package brings several important provisions into the UAE’s domestic minimum top-up tax (DMTT) framework, including:

  • The Substance-Based Tax Incentive Safe Harbour.
  • A Simplified Effective Tax Rate (ETR) Safe Harbour.
  • A one-year extension of the Transitional CbCR Safe Harbour.
  • A broader Side-by-Side System tailored for multinational enterprise groups headquartered in eligible tax regimes.

Impact on UAE taxpayers and tax incentives

For most UAE taxpayers, the standout feature of this update is the Substance-Based Tax Incentive Safe Harbour, which dictates how qualifying substance-based tax incentives are treated when computing the GloBE ETR and top-up tax. This is especially critical for the UAE’s new R&D Tax Credit, which applies to tax periods or fiscal years starting on or after 1 January 2026.

The UAE R&D Tax Credit may be capable of fitting within the OECD’s Qualified Tax Incentives (QTI) framework, though the outcome will depend on the statutory conditions, the factual design of the claim, the level of discretion involved, and the Substance Cap.

Furthermore, the Simplified ETR Safe Harbour is expected to be available in the UAE starting in FY2027, and it may even be relevant from FY2026 if specific OECD early-application conditions—such as the application of the UAE QDMTT Safe Harbour—are satisfied.