Ministry of Finance: A decision regarding the supplementary tax on multinational institutions from the Council of Ministers

Abu Dhabi, February 7 / WAM / The Ministry of Finance announced the issuance of Cabinet Resolution No. 142 of 2024 regarding the imposition of supplementary tax on multinational institutions, which provides more details about the minimum supplementary tax that will be imposed in the state “UAE DMTT”.

This comes after the announcement issued by the Ministry on December 9, 2024.
According to a statement issued today, the supplementary tax in the country is closely corresponding to the global rules to combat the erosion of the tax container issued by the OECD Economic Cooperation and Development Organization.

This supplementary tax will be imposed on the member entities of the group of multinational institutions that operate in the UAE and its annual annual revenues amount to 750 million euros or more according to the unified financial statements of the final mother entity in at least two years of the four financial years that directly precede the fiscal year that applies It has a supplementary tax.
The supplementary tax that will be applied in the state provides an exemption by excluding the income based on a realistic and sufficient presence, which is a deduction that reduces the net income of the second pillar subject to the supplementary tax to determine the excess profit for the purposes of the supplementary tax account, by an amount that is calculated based on the total salaries and the book value of material assets.
In line with the global rules to combat the erosion of the tax container, the supplementary tax in the UAE also allows the minimum, so that the amount of supplementary tax imposed on any member entity that exercises its work within the UAE is zero if it meets specific conditions.
In order to enhance the competitiveness of the UAE as a leading investment center, the supplementary tax has been designed so that it is not applied to investment entities, as it is known in these rules, and as part of transitional measures and with the aim of creating a tax environment conducive to economic growth, the complementary tax will not be imposed during the first stage of The start of the international activity of the group of multinational institutions, provided that a mother company does not have a qualified income base in another country ownership shares in any member entity.
The supplementary tax in the UAE should be explained in line with the administrative notes and directives issued by the Organization for Economic Cooperation and Development.
Cabinet Resolution No. 142 of 2024 can be found on the website of the “Emirates Legislation” platform.

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