According to Amac News: The UAE said that the additional domestic minimum tax is in line with the GloBE model rules issued by the Organization for Economic Co-operation and Development (OECD).
The UAE DMTT tax is imposed on entities that are members of multinational enterprises (MNEs). According to the decision, these entities must operate in the UAE and have an annual global revenue of €750 million or more. This revenue must be reflected in the consolidated financial statements of the Ultimate Parent Entity.
This revenue requirement must be met in at least two of the four fiscal years immediately preceding the fiscal year to which the UAE DMTT tax is applied.
This tax allows companies to reduce a portion of their net taxable income (Pillar Two) through an income-based exemption.
This exemption is designed to reduce net taxable income for the purpose of calculating excess profit that is subject to UAE DMTT.
The amount of this reduction is calculated based on two factors: Payroll, the amount that a company pays to its employees, and the Carrying Value of Tangible Assets, the current value of the company’s physical assets, such as buildings and machinery.
In order to strengthen the UAE’s competitiveness as a leading investment hub, the UAE DMTT tax is structured in such a way that investment entities are exempted under these rules.
As part of a transitional measure and to create a tax environment conducive to economic growth, no UAE DMTT will be levied during the initial phase of an MNE group's international activities, provided that none of the ownership interests of the UAE-based entities are held by a parent entity that is subject to the Qualifying Income Inclusion Law in another jurisdiction.