New era of tax compliance and transparency in the UAE began with new corporate tax updates and new tax updates slated for January 2025. Every business, regardless of the sector, ought to be vigilant and act in order to remain compliant.
The implementation of the Domestic Minimum Top-Up Tax (DMTT) applies to large multinationals, i.e., large firms with worldwide revenues exceeding €750 million. This is meant to ensure that these groups pay a minimum effective tax rate of 15%, which balances the UAE with the International Tax Obligations based on OECD standards.
For Free Zone companies, the 0% corporate tax rate will still be applicable; however, it will be under new and more stringent guidelines. In order for businesses to keep their exemption, they must meet all substance requirements and receive their income solely from qualifying activities. Any revenue that is qualifying or a limited tax presence may result in the loss of tax benefits.
The move towards tax compliance and the introduction of mandatory tax e-invoicing centers also applies to large businesses. This is meant to increase compliance and streamline the business’s tax communication with the Federal Tax Authority (FTA).
With these developments, businesses should review their tax structures, assess compliance gaps, and ensure that their financial reporting and documentation are fully aligned with the new regulations.
At our firm, we specialize in VAT compliance, corporate tax planning, FTA representation, tax dispute resolution, business setup, and financial reporting. Our experts can help you navigate the latest tax reforms and secure full compliance with confidence.
Contact us today for a free consultation and stay ahead of the 2025 tax changes.