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Pillar Two in the GCC – UAE’s Position in the Global Minimum Tax

 Pillar Two of the OECD BEPS framework introduces a 15% global minimum tax on profits of multinational enterprises (MNEs) with consolidated revenue exceeding EUR 750 million.


Core Concepts:

  • Global Anti-Base Erosion (GloBE) Rules

  • Income Inclusion Rule (IIR)

  • Undertaxed Profits Rule (UTPR)

  • Substance-Based Income Exclusion (SBIE)


UAE Developments:

  • Public consultations issued in 2024

  • Expected implementation in 2025 or 2026

  • Special consideration for Free Zones and QFZPs


Legal Reference:

  • OECD Model Rules (2021)

  • UAE Ministry of Finance Consultation Paper (2023)

  • Federal Decree law 60/2023

  • UAE Cabinet Decision 142/2024

  • UAE Ministerial Decision 88/2025

Official source: https://mof.gov.ae/uae-domestic-minimum-top-up-tax/


Key Challenges:

  • Group-wide coordination for compliance

  • Complex data and reconciliation needs

  • Aligning financials to GloBE metrics


Why Engage an Accredited Tax Advisor?
A skilled advisor can model Pillar Two impacts, prepare GloBE returns, and structure operations to benefit from SBIE and minimize top-up tax exposure.


Conclusion:
Pillar Two introduces a new compliance frontier. UAE MNEs must act early with professional support to adapt globally and stay competitive.

Location: Dubai - United Arab Emirates

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