In a significant move towards global tax alignment, the UAE Ministry of Finance announced on April 16, 2025, that it has formally adopted the latest guidance from the Organisation for Economic Co-operation and Development (OECD) on the Global Anti-Base Erosion (GloBE) Rules, also known as Pillar Two. The adoption was formalized through Ministerial Decision No. (88) of 2025.

The Global Minimum Tax, a core component of the OECD’s Pillar Two framework, aims to establish a minimum tax rate of 15% for large multinational enterprises (MNEs). By incorporating the OECD’s detailed commentary and rules, the UAE ensures clarity and certainty for businesses operating in the country, as it moves towards implementing its own Domestic Minimum Top-up Tax (DMTT) regime. This decision enhances the UAE's standing as a cooperative jurisdiction in global tax matters.

Strengthening the UAE's Tax Framework

This decision follows the UAE Cabinet's earlier issuance of Decision No. (142) of 2024, which mandated a Top-up Tax on Multinational Enterprises (MNEs). The UAE's latest move aligns its tax policies with international standards set by the OECD’s Inclusive Framework on Base Erosion and Profit Shifting (BEPS), of which the UAE is an active member.

The Ministry emphasized that the newly adopted Ministerial Decision integrates all administrative guidance and relevant commentary provided by the OECD up to January 2025. This ensures that the UAE’s Domestic Minimum Top-up Tax framework is fully aligned with the OECD GloBE Model Rules.

Implications for MNCs in the UAE

By adopting these international tax rules, the UAE aims to reduce the compliance burden for multinational corporations (MNCs) that fall under the scope of the Global Minimum Tax. The alignment with OECD standards will make it easier for businesses to navigate the international tax landscape and comply with the evolving regulatory requirements.

This step is a clear indication of the UAE’s commitment to remaining a leading player in the international tax community, offering businesses a predictable and stable tax environment while contributing to the OECD’s goal of global tax fairness.

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