UAE Clarifies Pillar Two Tax Reporting Obligations for Large Multinational Enterprises

The UAE Ministry of Finance has released ministerial decisions specifying compliance obligations under the Domestic Minimum Top-up Tax framework for multinational enterprise (MNE) groups, according to Aurne. The clarifications align domestic tax mechanisms with the OECD/G20 Pillar Two global minimum 15 percent tax rules, following Cabinet Decision No. 98 of 2023, which took effect for fiscal years starting on or after January 1, 2024.

Pillar Two requirements apply to MNE groups whose consolidated annual revenue in the Ultimate Parent Entity's consolidated financial statements reaches EUR 750 million or more in at least two of the four fiscal years preceding the tested year. All constituent entities of an in-scope MNE group located in the UAE fall within the scope of these rules.

Ministerial Decision No. 129 of 2024 clarified the content and submission procedures for the GloBE Information Return (GIR). The GIR requires reporting on group structure, jurisdictional financial and tax data, top-up tax calculations where effective tax rates fall below 15 percent, and top-up tax allocations. Groups may designate a single UAE-resident constituent entity as the Local Filing Entity to submit the GIR to the Federal Tax Authority (FTA) under specified conditions, such as when the parent jurisdiction lacks an operational GIR exchange agreement.

Under Ministerial Decision No. 138 of 2023 and Decision No. 129 of 2024, the general submission deadline for the GIR is 18 months after the end of the reporting fiscal year for the first year an MNE group enters scope, and 15 months after year-end for subsequent fiscal years. In-scope groups must also complete administrative notifications to the FTA identifying their status and responsible entities.