United Arab Emirates

Under the Emirate-level tax decrees, income tax is payable under a progressive rate system, with rates up to 55%. However, in practice, these tax decrees have not been applied. Instead, branches of foreign banks are subject to income tax at a flat rate of 20% under separate Emirate-level bank decrees. Companies engaged in UAE oil and gas and petrochemical activities are subject to income tax at varying rates under their individual UAE concession agreements or fiscal letters.

The Federal UAE CT Law, which is effective for each taxable person’s new financial year beginning on or after 1 June 2023, is applicable across all Emirates and applies to all business and commercial activities, except to the following exempt persons (subject to conditions):

• UAE government entity.
• UAE government-controlled entity.
• Person engaged in an extractive business in the United Arab Emirates.
• Person engaged in a non-extractive natural resource business in the United Arab Emirates.
• Qualifying public benefit entity.
• Qualifying investment fund.
• Public pension or social security fund, or a private pension or social security fund that is subject to regulatory oversight of the competent authority in the state and that meets any other conditions that may be prescribed by the Minister.
• Juridical person incorporated in the state that is wholly owned and controlled by certain exempt persons.
• Any other person as may be determined in a decision issued by the Cabinet at the suggestion of the Minister.

UAE CT is applicable at the following rates:

* Please refer to Free Zones in the Tax credits and incentives section.

Domestic Minimum Top-up Tax (DMTT)

Following the issuance of Federal Decree Law No. 60 of 2023, a DMTT is effective in the United Arab Emirates for financial years starting on or after 1 January 2025. This strategic step reflects the United Arab Emirates’ commitment to implementing the OECD Two-Pillar Solution, aimed at establishing a fair and transparent tax system aligned with global standards.

The Pillar Two rules require large MNEs to pay a minimum effective tax rate of 15% on profits in every country where they operate. The DMTT will apply to MNEs operating in the United Arab Emirates with consolidated global revenues of EUR 750 million or more in at least two out of the four financial years immediately preceding the financial year in which the DMTT applies. The United Arab Emirates’ implementation of the DMTT will closely align with the OECD’s GloBE Model Rules.

Further, Cabinet Decision No. 142 of 31 December 2024 introduced the detailed legislation on the UAE DMTT, including cases, provisions, conditions, rules, controls, and procedures. It is broadly aligned with the OECD’s Inclusive Framework.

For more detailed information and the most recent updates, please visit PwC’s Pillar Two Country Tracker.