The UAE plans to start a new tax at the beginning of 2025 and is considering incentives to help businesses boost the economy.
Source: freepik
The UAE Ministry of Finance has shared updates related to Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. [?]
These changes include adding a new tax and offering incentives to encourage growth and innovation.
These changes include adding a new tax and offering incentives to encourage growth and innovation.
UAE to Introduce New Tax and Business Support Measures
Starting January 1, 2025, the UAE will introduce a new tax called the Domestic Minimum Top-up Tax (DMTT). This is based on the new law, Federal Decree Law No. 60 of 2023.
Source: freepik
This shows the UAE's commitment to fairer global taxes, following the Organization for Economic Co-operation and Development’s (OECD's) Two-Pillar Solution guidelines. The goal is to ensure large companies pay a minimum amount of tax everywhere they operate.
The consensus‐based Two‐Pillar Solution plays an important role to ensure fairness and equity in our tax systems and to fortify the international tax framework in the face of new and changing business models.[?]
This means large international companies will need to pay at least 15% tax on their profits in every country they work in.
The DMTT in the UAE will only affect very large international companies — those earning EUR 750 million (around USD 794 million) or more globally in at least two of the four years before the tax takes effect. The UAE's new tax (DMTT) will closely align with the OECD's global tax rules.[?] The Ministry of Finance will provide more details later.
The UAE remains focused on making it easier to do business. This is part of its plan to boost the economy and make the country more competitive. To encourage long-term growth, new ideas, and investment, the Ministry of Finance is looking at adding new tax breaks for businesses under Federal Decree-Law No. 47 of 2022.
To boost research, innovation, and economic growth in the UAE, a new tax break for Research and Development (R&D) is being considered. This tax break is planned to start on January 1, 2026, based on feedback received earlier this year.
Companies could get a tax credit worth 30-50% of their R&D spending.[?] This credit may be refundable, meaning companies could get money back, depending on their UAE revenue and number of employees.
Qualifying R&D activities will follow international guidelines and must be done within the UAE. Another possible tax break being considered is a refundable credit for companies that create high-value jobs.
This proposed incentive encourages businesses to contribute to the UAE's economy, boost innovation, and make the country more competitive globally.
Starting January 1, 2025 (these incentives still need to be officially approved), companies could get a tax break based on the salaries of their high-value employees.[?] This includes top executives (like CEOs and CFOs) and other key staff whose work significantly benefits the UAE economy.
The Ministry of Finance will share more details and instructions later.
The DMTT in the UAE will only affect very large international companies — those earning EUR 750 million (around USD 794 million) or more globally in at least two of the four years before the tax takes effect. The UAE's new tax (DMTT) will closely align with the OECD's global tax rules.[?] The Ministry of Finance will provide more details later.
The UAE remains focused on making it easier to do business. This is part of its plan to boost the economy and make the country more competitive. To encourage long-term growth, new ideas, and investment, the Ministry of Finance is looking at adding new tax breaks for businesses under Federal Decree-Law No. 47 of 2022.
To boost research, innovation, and economic growth in the UAE, a new tax break for Research and Development (R&D) is being considered. This tax break is planned to start on January 1, 2026, based on feedback received earlier this year.
Companies could get a tax credit worth 30-50% of their R&D spending.[?] This credit may be refundable, meaning companies could get money back, depending on their UAE revenue and number of employees.
Qualifying R&D activities will follow international guidelines and must be done within the UAE. Another possible tax break being considered is a refundable credit for companies that create high-value jobs.
This proposed incentive encourages businesses to contribute to the UAE's economy, boost innovation, and make the country more competitive globally.
Starting January 1, 2025 (these incentives still need to be officially approved), companies could get a tax break based on the salaries of their high-value employees.[?] This includes top executives (like CEOs and CFOs) and other key staff whose work significantly benefits the UAE economy.
The Ministry of Finance will share more details and instructions later.
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