The DMTT is part of the OECD’s global minimum corporate tax agreement which has 136 signatories, including the UAE, to ensure big companies pay a minimum of 15% and to make tax avoidance harder.

In amendments to the corporate tax law, the UAE’s finance ministry said the DMTT will apply to companies with consolidated global revenue of €750 million (US$793.50 million) or more in at least two out of the four financial years preceding the ones in which the tax comes into effect.

The UAE, including Dubai, is a hub for multinationals in the Middle East and the tax amendments come a year after the UAE began rolling out a 9% business tax, with exemptions for the many free zones which power its economy.

The DMTT comes under the Organisation for Economic Co-operation and Development’s (OECD) Two-Pillar Solution, which stipulates that large multinational enterprises pay a minimum effective tax rate of 15% on profits in each country where they operate.

The UAE’s finance ministry said it is also considering introducing a number of corporate tax incentives, including one for research and development (R&D) that would apply for tax periods starting in 2026.

“The expenditure-based incentive would offer a potential 30%-50% refundable tax credit depending on the size of the company’s operations in the UAE and revenue,” the ministry added.

“A refundable tax credit for high-value employment activities that would be granted to companies as a percentage of eligible income costs for employees is also being considered and could be applied as early as Jan 1 2025,” the ministry said.

Such proposed incentives remain subject to legislative approval.