UAE Adopts OECD Guidance on Global Minimum Tax

The UAE has taken another important step in aligning with international tax standards with the recent issuance of Ministerial Decision No. (88) of 2025. This decision formally adopts the complete set of guidance materials from the Organisation for Economic Co-operation and Development (OECD) on the Global Anti-Base Erosion (GloBE) rules, commonly known as Pillar Two.

Key Points of the Ministerial Decision

The new decision, which follows Cabinet Decision No. (142) of 2024 on multinational enterprise taxation incorporates all OECD Administrative Guidance and commentary published through January 2025. This comprehensive adoption includes six specific OECD publications that provide detailed implementation guidance for the global minimum tax framework.

What This Means for Multinational Businesses

For companies with global operations that meet the threshold for GloBE rules, this development brings both clarity and compliance considerations:

1. The UAE’s Domestic Minimum Top-up Tax (DMTT) framework now fully aligns with international standards, reducing potential conflicts between different jurisdictional requirements.
2. Multinational enterprises can rely on the comprehensive OECD guidance materials when planning their tax strategies in the UAE.
3. The decision strengthens the UAE’s status as a jurisdiction committed to international tax transparency and cooperation.

Background on the Global Minimum Tax

The GloBE rules represent a coordinated international effort to ensure that large multinational enterprises pay a minimum effective tax rate of 15% in each jurisdiction where they operate. This aims to address tax challenges arising from the digitalization of the economy and prevent profit shifting to low-tax jurisdictions.

The UAE’s proactive approach in implementing these standards demonstrates its commitment to maintaining its position as a trusted global business hub while adhering to evolving international tax norms.

Next Steps for Businesses

Multinational groups operating in the UAE should:

1. Review the adopted OECD guidance materials to understand specific implementation requirements
2. Assess whether their operations meet the threshold for GloBE rules application
3. Prepare for potential top-up tax obligations under the new framework
4. Consider how the alignment with OECD standards impacts their overall tax planning strategy

TME Services provides comprehensive support for businesses navigating these new tax developments, including compliance assessment, strategic planning, and implementation guidance tailored to your specific business structure.