The Ministry of Finance (MoF) of the United Arab Emirates (UAE) has changed Federal Decree-Law No. 47 of 2022 on the Taxation of Corporations and Businesses. The main changes that were announced on December 9, 2024, include a domestic minimum top-up tax (DMTT) and plans for tax breaks for new ideas and high-value jobs. When it takes effect on January 1, 2025, the DMTT will align with the OECD's two-pillar plan to prevent people from avoiding paying taxes. Under Pillar Two, multinational companies (MNEs) that generate at least EUR750 million (US$787.7 million) annually must tax their profits at a rate of at least 15% in every country where they operate. In the next few months, the MoF will give out more information.
There would be a tax incentive for research and development (R&D) and an incentive for high-value jobs. Incentives for R&D will include a 30–50% tax credit that can be refunded starting January 1, 2026. Starting on January 1, 2025, the high-value employment incentive will reward companies that hire senior professionals who make the UAE's economy more competitive. A percentage of your salary will be used to figure out the tax credit. In due time, the ministry will give more information.
Those interested in converting research and development into a return on investment in the UAE can find a breakdown in today's blog.
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