UAE Corporate Tax — Pillar Two (GloBE) Reference 2026
Global minimum tax (Pillar Two / GloBE) is being implemented in UAE for large multinationals. Here is the 2026 reference for UAE free zone businesses on Pillar Two applicability.
In this guide:
What Is Pillar Two?
- Definition: OECD global minimum tax framework; 15% minimum effective tax rate on large multinational groups
- Threshold: Applies to MNE groups with consolidated annual revenue exceeding EUR 750 million
- Implementation: UAE implementing Pillar Two via the Domestic Minimum Top-Up Tax (DMTT) effective January 2025
UAE Domestic Minimum Top-Up Tax (DMTT)
- Who it applies to: UAE entities belonging to large MNE groups (EUR 750M+ revenue)
- Rate: Minimum 15% effective tax rate; top-up tax if actual UAE CT effective rate below 15%
- UAE QFZP rate: UAE free zone companies that benefit from 0% qualified income rate may face DMTT top-up to reach 15% minimum
Impact on UAE Free Zone Companies
- Threshold: Only MNE groups above EUR 750M revenue; small/medium free zone companies NOT affected
- Large multinationals: Global groups with UAE free zone subsidiaries must assess GloBE rules; their UAE FZ entities may face DMTT
- QFZP carve-out: UAE is working on substance-based income exclusion rules to reduce GloBE impact
What Small/Medium UAE Free Zone Companies Should Know
- No impact if below EUR 750M: If your consolidated group revenue is below EUR 750M, Pillar Two does NOT apply
- Future threshold: Monitor if threshold is lowered in future OECD guidance