With Decision No. 12 of 2026, the UAE Federal Tax Authority (FTA) has completed the procedural framework of the Pillar Two regime. Specifically, the Decision sets clear deadlines for UAE DMTT registration, deregistration and in-scope/out-of-scope notifications. As a result, international multinational groups operating in the Emirates now have concrete operational references. Ultimately, this clarity supports better compliance planning across the region.
The context: Domestic Minimum Top-up Tax and Pillar Two in the UAE
The Domestic Minimum Top-up Tax (DMTT) was introduced through Cabinet Decision No. 142 of 2024. In practice, this decision incorporates the OECD Pillar Two framework on global minimum taxation into UAE law. Moreover, the regime applies to multinational groups with consolidated revenues of EUR 750 million or more. In particular, this threshold must be met in at least two of the four preceding fiscal years. Furthermore, the rules cover fiscal years starting on or after 1 January 2025. CroweAffiniax
The objective is clear: ensure a minimum effective tax rate of 15% on profits generated in the UAE by large international groups. Indeed, this approach fully aligns with OECD/G20 standards. Notably, the UAE has adopted a targeted implementation strategy. Specifically, only the Domestic Minimum Top-up Tax has been introduced. As a result, the Income Inclusion Rule and the Undertaxed Profits Rule remain outside the local framework. Consequently, the country retains taxing rights on locally generated profits. Affiniax
UAE DMTT registration: what FTA Decision No. 12 of 2026 introduces
Issued on 16 July 2026 and published on 4 August 2026, the Decision establishes four procedural pillars for entities within scope of the UAE Pillar Two rules. Crowe
1. Top-up Tax registration
Entities subject to the UAE Top-up Tax must submit their registration application within 7 months. Specifically, this window runs from the end of the first fiscal year in which they fall within scope. However, a transitional rule also applies. In particular, for entities whose fiscal year ends before 30 April 2026, the deadline is extended to 30 November 2026. As a result, groups that recently identified their applicability gain valuable additional time. PwCAcclime UAE
2. Deregistration
Entities that leave the DMTT perimeter must submit a deregistration application within 6 months. Specifically, the deadline runs from the earlier of two events. These are the entity’s cessation date, or the fiscal year-end when it leaves the MNE Group. However, an entity cannot be deregistered until all Top-up Tax liabilities and penalties have been settled. In addition, all required Top-up Tax Returns and Pillar Two Information Returns must have been filed. Importantly, for entities that ceased to exist before 30 June 2026, the transitional deadline is 31 December 2026. Crowe
3. Out-of-scope notification
Where an MNE Group falls outside the Pillar Two thresholds for a tested fiscal year, an out-of-scope notification must be filed. Specifically, submission is required within 6 months from the end of that year. Furthermore, the notification remains valid for the tested fiscal year and the four subsequent fiscal years. However, this validity ends earlier if the group re-enters scope. Finally, if the group remains out of scope for five consecutive fiscal years, deregistration is required within 6 months.
4. Domestic Designated Filing Entity (DDFE)
Groups may appoint a single UAE entity as the Domestic Designated Filing Entity. As a result, this designated entity can handle registration, filing and payment on behalf of all UAE constituent entities. In practice, this is a significant simplification for groups with multiple companies in the Emirates. Moreover, it centralises administrative filings under one designated point of accountability. Bestaxca
Filing timelines and transitional penalty relief
The first Top-up Tax Return must be filed within 15 months from the end of the fiscal period. However, this window extends to 18 months for the initial transitional year. Therefore, for calendar-year 2025 groups, the first filing deadline is 30 June 2027. Tax Consultant Dubai
On the penalty side, the UAE has introduced a broad transitional window. During this window, no penalties apply to the filing of the Top-up Tax Return or the Pillar Two Information Return. Specifically, the relief covers fiscal years beginning on or before 31 December 2026. However, it only holds if the group has taken reasonable measures to apply the rules correctly. Moreover, the relief does not cover fiscal years ending after 30 June 2028. Importantly, this transitional protection does not extend to late payment of the actual top-up tax liability. Acclime UAEMiddle East Briefing
What this means for international groups in the Emirates
FTA Decision No. 12 of 2026 completes a phased implementation path. As a result, the UAE now ranks among the clearest jurisdictions globally in applying the Pillar Two framework. For multinational groups operating or planning to expand into the Emirates, this translates into three concrete advantages:
- Regulatory certainty for compliance planning across the 2026–2028 window
- Operational simplification through the DDFE mechanism for groups with multiple UAE entities
- Alignment with OECD standards, strengthening the jurisdiction’s reputation with institutional investors and international boards
Notably, one key point deserves attention: DMTT also applies to free zone entities that belong to multinational groups above the EUR 750 million threshold. In other words, free zone status does not automatically exempt an entity from the Pillar Two perimeter. Tulpartax
Kelmer Group: strategic support for international groups in the UAE
The Pillar Two framework in the Emirates is not merely a technical tax compliance matter. Indeed, it affects group structure, corporate governance, and the choice of the most efficient operational base. Kelmer Group supports international groups in assessing DMTT applicability. In addition, our team assists with planning FTA registration, appointing the DDFE, and preparing for the first Top-up Tax filing cycle.
For a tailored assessment of the DMTT impact on your UAE structure, contact our Dubai office: dubai@kelmer.com.