What is the Domestic Minimum Top-up Tax?

Article 2 – Charging Provision 2.1 The following Entities shall pay the Top-up Tax for a Fiscal Year: (a) Constituent Entities located in the UAE during that Fiscal Year, including those that are members of a Minority-owned Subgroup. (b) Joint Ventures and JV Subsidiaries located in the UAE during that Fiscal Cabinet Decision No. 142 of 2024 – As published in the Official Gazette 5 2.2 2.3 Year; (c) Stateless Constituent Entities created in accordance with the laws of the UAE and that are Reverse Hybrid Entities, with respect to any of their Pillar Two Income or Loss as allocated and computed in accordance with this Decision. Notwithstanding Article 2.1: (a) the Constituent Entities of the Domestic Main Group and a Domestic Minority-owned Subgroup, may appoint a Domestic Designated Filing Entity to pay the Top-up Tax on behalf of the members of their Domestic Groups; (b) the Joint Venture and JV Subsidiaries of a Domestic JV Group may appoint a Domestic Designated Filing Entity to pay the Top-up Tax on behalf of the members of their Domestic JV Group; and (c) the Reverse Hybrid Entities referred to in Article 2.1 (c), may appoint a Domestic Designated Filing Entity that is a member of the Domestic Main Group or Domestic Minority-owned Subgroup to pay its Top-up Tax. An Investment Entity located in the UAE is not subject to the Top-up Tax.

To preserve its own taxing right, a jurisdiction may also consider imposing a Domestic Minimum Top-up Tax (“DMTT”). If a jurisdiction implements a DMTT that is consistent with the outcomes of the GloBE Rules and does not provide any benefits that are related to the rules, such a DMTT will qualify as a Qualified Domestic Minimum Topup Tax (“QDMTT”) and can be deducted from the Top-up Tax liability under the GloBE Rules in respect of that jurisdiction. This agreed rule order allows a jurisdiction to preserve its primary taxing right over profits derived by Entities located in its own jurisdiction. The UAE has introduced a QDMTT for Fiscal Years beginning on or after 1 January 2025 under the “QDMTT Legislation” (see section 3.2). Currently, the UAE does not have an IIR or UTPR. 3.2. Implementation of Top-up Tax on Multinational Enterprises in the UAE The UAE has implemented the QDMTT Legislation as part of its commitment to implement the OECD/G20 two-pillar solution, aimed at establishing a fair and transparent tax system aligned with global standards. The UAE amended its Corporate Tax Law through Federal Decree-Law No. 60 of 2023 to facilitate the imposition of a DMTT. Subsequently, Cabinet Decision No. 142 of 2024 was issued introducing detailed rules for the DMTT. On 18 August 2025, the UAE was listed in the OECD central record of the legislation with transitional qualified status. This means that the DMTT in the UAE has secured transitional “qualified” status to be considered a QDMTT. Consequently, the cases, provisions, conditions, rules, controls, and procedures on the imposition of Top-up Tax attached to Cabinet Decision No. 142 of 2024 are referred to as the QDMTT Legislation across this guide. The QDMTT Legislation closely follows the provisions of the Global Anti-Base Erosion Model Rules (Pillar Two) as published by the OECD. Ministerial Decision No. 96 of 2026 was issued, formally adopting the following guidance published by the OECD for the purposes of the QDMTT Legislation: • OECD (2026), Tax Challenges Arising from the Digitalisation of the Economy – Consolidated Commentary to the Global Anti-Base Erosion Model Rules (2026): Inclusive Framework on BEPS, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. • OECD (2026), Tax Challenges Arising from the Digitalisation of the Economy – Administrative Guidance on the Global Anti-Base Erosion Model Rules (Pillar Top-up Tax Guide | Scope and Registration | TTGREG1 21

Controlling Interest: means an Ownership Interest in an Entity such that the interest holder: a. is required to consolidate the assets, liabilities, income, expenses and cash flows of the Entity on a line-by-line basis in accordance with an Acceptable Financial Accounting Standard; or b. would have been required to consolidate the assets, liabilities, income, expenses and cash flows of the Entity on a line-by-line basis if the interest holder had prepared Consolidated Financial Statements. A Main Entity is deemed to have the Controlling Interests of its Permanent Establishments. Corporate Tax: The tax imposed by the Corporate Tax Law on juridical persons and Business income. Corporate Tax Law: Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses, and its amendments. Domestic Designated Filing Entity (“DDFE”): means a. a Constituent Entity that files the Top-up Tax Return and pays the Top-up Tax on behalf of all members of a Domestic Main Group, a Domestic Minority-owned Subgroup or a Reverse Hybrid Entity; or b. a Joint Venture or JV Subsidiary that files the Top-up Tax Return and pays the Top-up Tax on behalf of all members of a Domestic JV Group. Domestic Group: means a. one or more Constituent Entities of an MNE Group located in the UAE (Domestic Main Group); b. one or more Constituent Entities, located in the UAE, of the same Minority-Owned Subgroup (Domestic Minority-owned Subgroup): or c. a Joint Venture, a Joint Venture and one or more JV Subsidiaries, or one or more JV Subsidiaries, located in the UAE, of the same JV Group (Domestic JV Group). Entity: means a. any juridical person; or b. an arrangement that prepares separate financial accounts, such as a partnership or trust; but does not include natural person, central, state, or local government or their administration or agencies that carry out government functions. EUR: means the currency of the European Monetary Union. Top-up Tax Guide | Excluded Entities and Investment Entities | TTGEIE1 4

Article 5.2.2 for the Fiscal Year; and (c) The Additional Current Top-up Tax is the amount determined, or treated as Additional Current Top-up Tax, under Article 4.1.5 or Article 5.4.1 for the Fiscal Year. 5.2.4 Unless a Domestic Designated Filing Entity has been appointed to pay the Top-up Tax or except where Article 5.4.2 applies, the Top-up Tax of a Constituent Entity shall be determined for each Constituent Entity located in the UAE that has Pillar Two Income determined in accordance with Article 3 for the Fiscal Year included in the computation of Net Pillar Two Income of the UAE in accordance with the following formula: Pillar Two 𝐼𝑛𝑐𝑜𝑚𝑒 𝑜𝑓 𝑡ℎ𝑒 Constituent Entity 𝑇𝑜𝑝 𝑢𝑝 𝑇𝑎𝑥 𝑜𝑓 𝑎 Constituent Entity = 𝑇𝑜𝑝 𝑢𝑝 𝑇𝑎𝑥 X 𝐴𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒 Pillar Two 𝐼𝑛𝑐𝑜𝑚𝑒 𝑜𝑓 𝑎𝑙𝑙 Constituent Entities Where: (a) The Top-up Tax is the Top-up Tax determined in accordance with Article 5.2.3 for the Fiscal Year; (b) The Pillar Two Income of the Constituent Entity is the Pillar Two Income of the Constituent Entity located in the UAE determined in accordance with Article 3.2 for the Fiscal Year; (c) The aggregate Pillar Two Income of all Constituent Entities is the aggregate Pillar Two Income of all Constituent Entities located in the UAE that have Pillar Two Income for the Fiscal Year included in the computation of Net Pillar Two Income in accordance with Article 5.1.2. 5.2.5 Where a Domestic Designated Filing Entity has not been appointed to pay the Top-up Tax, the Top-up Tax is attributable to a recalculation under Article 5.4.1 and there is no Net Pillar Two Income in the UAE for the current Fiscal Year, the Top-up Tax shall be allocated using the formula in Article 5.2.4 based on the Pillar Two Income of the Constituent Entities in the Fiscal Years for which the recalculations under Article 5.4.1 were performed. 5.2.6 Where the Effective Tax Rate computed in accordance with Article 5.1.1 is less than zero and the Top-up Tax Percentage computed in accordance with Article 5.2.1 is above the Minimum Rate, the following provisions shall apply: Cabinet Decision No. 142 of 2024 – As published in the Official Gazette 29 (a) the Excess Negative Tax Expense shall be excluded from its aggregate Adjusted Covered Taxes and an excess negative tax expense carry-forward shall be established; (b) the Excess Negative Tax Expense for a Fiscal Year is equal to the negative Adjusted Covered Taxes for that Fiscal Year; (c) the excess negative tax expense carry-forward must be utilised in all relevant subsequent computations of the Jurisdictional Effective Tax Rate; (d) in each subsequent Fiscal Year in which there is positive Pillar Two Income and Adjusted Covered Taxes in the UAE, the aggregate Adjusted Covered Taxes shall be reduced (but not below to zero) by the remaining balance of the excess negative tax expense carry-forward and such carry-forward shall be reduced by the same amount; (e) the excess negative tax expense attributable to an amount of a loss that is carried back and applied against income for prior taxable years for domestic tax purposes must be taken into account in the current Fiscal Year under