The Federal Tax Authority has issued guidance to help Multinational Enterprise Groups determine whether they fall within the scope of the UAE’s Qualified Domestic Minimum Top-up Tax Legislation and how to register.
The Federal Tax Authority (FTA) of the United Arab Emirates (UAE) has issued a new Top-up Tax Guide on Scope and Registration on 7 October 2026. The Guide supports Multinational Enterprise (MNE) Groups in understanding how the Top-up Tax on Multinational Enterprises applies in the UAE and what registration obligations they have under the relevant legislation.
Scope determination
The Guide explains how to determine whether an MNE Group falls within the scope of the Qualified Domestic Minimum Top-up Tax (QDMTT) Legislation. It sets out the conditions for MNE Groups to be in scope and the types of Entities that are subject to Top-up Tax and those that are not.
Registration and filing
The Guide covers the registration process and the applicable timelines for Entities subject to the legislation. It also addresses the location of Entities and Permanent Establishments, registration requirements and procedures, and the filing of the Pillar Two Information Return.
Practical explanations and examples
The Guide provides practical explanations and examples on the relevant requirements. These include the treatment of different types of Entities, Permanent Establishments, Joint Ventures, Flow-through Entities and Hybrid Entities.
Intended users
The Guide is intended for those responsible for the tax affairs of Entities that may be members of an MNE Group, as well as Tax Agents.
Entities in scope under the QDMTT Legislation
Under the QDMTT Legislation, the Top-up Tax applies to Constituent Entities located in the UAE that are members of an MNE Group with annual revenue of EUR 750 million or more. The revenue must be reflected in the Consolidated Financial Statements of the Ultimate Parent Entity in at least two of the four Fiscal Years immediately preceding the Fiscal Year under consideration.
Groups that conduct their activities exclusively within the UAE do not fall within the scope of the QDMTT Legislation, irrespective of the amount of their revenue.
International framework
The UAE’s implementation of the Top-up Tax forms part of the OECD/G20 Two-Pillar Solution, which aims to address the tax challenges arising from the digitalisation of the economy. This includes the Global Anti-Base Erosion (GloBE) Model Rules under Pillar Two, which seek to ensure that in-scope MNE Groups are subject to an effective tax rate of at least 15% in each jurisdiction in which they operate, through a Top-up Tax mechanism.
UAE implementation and status
The UAE introduced the QDMTT legislation for Fiscal Years beginning on or after 1 January 2025. The authority said the QDMTT enables the UAE to preserve its primary taxing right over profits derived by entities located in the country.
The UAE was listed in the Organisation for Economic Co-operation and Development (OECD) central record on 18 August 2025 with “transitional qualified” status. The QDMTT Legislation also closely follows the GloBE Model Rules under Pillar Two issued by the OECD.
Authority’s statement
The authority said the issuance of the Guide reflects its commitment to providing businesses with clear and practical guidance on the UAE’s evolving tax framework, so that they can meet their obligations. It added that the UAE’s implementation of Pillar Two reflects the leadership’s vision to maintain a competitive, transparent and sustainable economic environment, while ensuring that the national tax system continues to develop in line with international best practices. The authority said it remains committed to supporting taxpayers and facilitating voluntary compliance through comprehensive guidance and continued engagement with the business community.
Guidance for Entities
The authority emphasised that the Guide should be read in its entirety to gain a comprehensive understanding of the definitions, requirements and interaction of the different rules. Entities that may form part of an MNE Group are encouraged to review their circumstances against the relevant requirements of the QDMTT Legislation and consult the Guide to understand the applicable scope and registration requirements.
This announcement was made on 8 October 2026.
