Spotlight On: What is the UAE’s New Domestic Minimum Top-up Tax (DMTT)

Heard whispers about the UAE’s new Domestic Minimum Top-up Tax (DMTT)? This blog breaks down exactly what it is, who it affects (spoiler: not you, unless you're a multi-million pound business), and why it matters for companies with serious global reach. A must-read for expats, business owners and advisors keeping an eye on Dubai’s evolving tax landscape.

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The Tax Faculty

6/12/20252 min read

Dubai has long been known as a low-tax, business-friendly destination — one of the reasons so many expats and entrepreneurs choose to live, work, or relocate their businesses here.

But 2025 brings a new acronym into the mix: DMTT — Domestic Minimum Top-up Tax.

While the name might sound technical, don’t worry. In this blog, we’ll explain what the DMTT is, why it was introduced, and (crucially) whether it impacts you or your business.

Introducing DMTT

What is the DMTT?

The Domestic Minimum Top-up Tax (DMTT) is a new corporate tax introduced in the UAE in 2025. It forms part of the country’s compliance with the OECD’s global minimum tax framework, also known as Pillar Two of the international tax reform.

The purpose? To ensure that the world’s largest multinational companies pay at least 15% effective tax on their global income, regardless of where they operate.

Who Does It Affect?

Not small businesses or individuals.

The DMTT only applies to large multinational enterprise groups (MNEs) with:

Annual consolidated global revenue of €750 million or more (around £640 million+ or AED 3 billion)

A presence in the UAE, such as a branch, subsidiary or holding company

So unless you’re heading up a global corporation, the DMTT is unlikely to touch your business.

Why Was It Introduced?

Dubai (and the wider UAE) introduced the DMTT to align with international tax standards, particularly under the OECD’s Inclusive Framework. This ensures the UAE avoids being blacklisted by global tax authorities and maintains its reputation as a legitimate, transparent jurisdiction.

In short:

It keeps global regulators happy

It helps the UAE continue to be a respected financial hub

It targets only the very largest companies, not local entrepreneurs or SMEs

city skyline across body of water during daytime

How Does the DMTT Work?

If a qualifying MNE operates in the UAE and pays less than 15% effective tax here, the UAE will now require that "top-up" tax is paid locally — bringing the total to the 15% minimum.

This avoids the risk of another country (such as where the parent company is based) collecting that shortfall instead.

Example:

Let’s say a global logistics firm based in Europe operates a subsidiary in Dubai that pays 9% tax locally. Under DMTT, the UAE would apply a 6% top-up, keeping the full 15% tax in the country — instead of letting another jurisdiction claim it.

Does This Affect You?

If you're:

A freelancer or sole trader in Dubai

A small-to-medium expat business owner

Someone considering relocating or expanding into the UAE

Then no, the DMTT does not apply to you. You’re still subject to the UAE’s existing 9% corporate tax for businesses earning over AED 375,000, with 0% on qualifying personal income (e.g., employment, rental income, capital gains).

However, if you’re part of a large multinational, the DMTT is something your finance team (or us!) should be across.

Final Thoughts from Our Team

At The Tax Faculty, we specialise in helping expats and international entrepreneurs make sense of the UAE’s tax landscape — from understanding when and where tax applies, to optimising your structure for growth.

The DMTT is a clear sign that Dubai is modernising its tax system in line with international norms — without penalising everyday residents or SME owners.

Still unsure how this fits into your personal or business plans? We’re happy to chat.