United Arab Emirates - Global minimum tax will not be implemented in 2024

The UAE Ministry of Finance (MoF), in cooperation with the OECD, recently hosted a Regional Forum on the Global Minimum Tax. The Forum—attended by senior tax experts and specialists—focused on the importance of the 15% global minimum tax, the top-up tax, the need to understand the rules and how they are implemented, and legislative approaches.

During the meeting, the MoF reaffirmed the government’s commitment to support the international efforts to address tax base erosion and profit shifting and contribute to the continuous improvement of the global economic environment.

Also discussed were reports that the UAE may not implement the Pillar Two rules in 2024; instead, the MoF will hold a public consultation on the rules and their impact on UAE taxpayers in Q1 2024. Given this, UAE-headquartered businesses will not be subject to global minimum tax in UAE in 2024, but the implications of Pillar Two in other jurisdictions still will have to be analysed. UAE businesses that are a part of a multinational group covered by Pillar Two also may have to calculate the top-up tax in the headquartered jurisdiction. 

Ashish Athavale
Brian Conn
BDO in United Arab Emirates