FAQ – Article 70 – Publication and Application of this Decree-Law

Source: https://mof.gov.ae/corporate-tax-faq/

  1. Will the UAE CT regime tax large multinationals at the global minimum tax rate?

The UAE is a member of the OECD BEPS Inclusive Framework and is committed to addressing the challenges faced by tax jurisdictions internationally. As such, the introduction of a CT regime helps to provide the UAE with a framework to adopt the Pillar Two rules.

Until such time as the Pillar Two rules are adopted by the UAE, multinationals will be subject to CT under the regular UAE CT regime.

Further information will be released in due course on the implementation of the Pillar Two rules in the UAE.

  1. What is meant by “large” multinationals?

A multinational corporation is a corporation that operates in its home country, as well as in other countries through a foreign subsidiaries, branches or other entity forms of presence / registration. Merely earning foreign sourced income from outside its home country without a foreign presence or registration in a foreign country would not make a business a multinational corporation.

In the context of the global minimum effective tax rate as proposed under ‘Pillar Two’ of the OECD Base Erosion and Profit Shifting project, ”large” refers to a multinational corporation that has consolidated global revenues in excess of the UAE Dirham equivalent of EUR 750 million.

 

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