VAE radiates the corporation tax framework with important updates on controlled financial data and global minimum tax rules
As part of its continuous efforts to improve transparency and to be in accordance with international tax standards, the Ministry of Finance of the VAE has announced two important developments that directly influence the compliance of Corcy and the multinational group heating in the country. This is what companies need to know.
Ministerial Decree No 84 of 2025 – Mandatory financial statements for tax groups
In April 2025, the Ministry issued Ministerial Decree No 84 of 2025, which ameshable, which ameshable decision no. 82 of 2023 with regard to controlled financial statements under the VAE company tax Act (Federal Decree Layer No. 47 of 2022). This marks a crucial shift in reporting obligations, especially for tax groups.
Main changes introduced:
- Checked agreed financial statements now mandatory for all tax groups
- Rugardless of the annual income, all tax groups are now obliged to prepare and submit AGGGGEGATED financial statements of special purposes for puppies for corporation tax. This movement standardizes reporting and remaves the earlier exemption that applies to groups with a lusty 50 million under AED.
- Exemption from independent audits with groups
- Entities that are part of a tax group are no longer needed to mainize controlled financial statements, thereby streamlining the compliance process and reducing the duplication of audit efforts.
- Regarding requirements for non-groups of entities
- Entities that are not part of a tax group must continue to prepare controlled financial data if their annual income is higher than 50 million or if they claim a qualifying free zone person (QFZP).
- Clarification for non-residents
- Non-resident Legal Persians are required to consider only income from the VAE-wide income (via permanent location or Nexus) when determining whether they comply with the AED 50 million audit threshold.
- FTA guidelines in treatment for QFZPs
- Soon additional requirements will be issued for QFZPs that are killed in distribution activities from designated zones, which will probably find many companies that are active in logistics and trade hubs.
The approval of OECD guidelines for global minimum load (pillar two frameworks)
In a parallel step with worldwide implications, the VAE has announced the approval of the OECD guidelines and comments about the Global Anti-Base Erosion (Globe) rules under pillar two. This decision reinforces the dedication of the VAE to international tax terms and is speech in the landscape for large multinational companies (MNES).
What this means:
- 15% domestic minimal topping tax (DMTT)
- From January 1, 2025, 15% DMTT will apply to Mnes with global consolidated turnover of € 750 million or more in two of the last four financial years. This increases that Mnes pays a minimum level of tax in the VAE, returnless of local stimuli.
- Coordination with OECD pillar Two objectives
- The move is part of the dedication of the VAE to the global minimum tax framework, with the aim of reducing harmful tax competition and profit shift.
- Future stimuli are considered
- The Ministry also evaluates economic stimuli that are two-compliant pillars, such as:
- A tax credit for research and development (30-50%)
- A high -quality employment credit based on qualifying person in the VAE
- These are subject to legislative approval and are subject to maintaining the competition of the VAE and at the same time meet international standards.
What companies have to do now
These announcements offer both Compliance -Properties and Strategic Opportunities:
- Tax groups must revise their reporting processes and experience the readiness for consolidated consolidated financial data.
- Free Zone
- Mnes that operates in the VAE must prove the exposure to the 15% DMTT and evaluate the structuring of the entity and the local substance.
The direction of the VAE is clear: Local coordination with global tax integrity initiatives while maintaining the attractiveness for foreign investments through conforming and smart regulations.
This article was prepared by Marco Marazzi, Business Solutions Legal Advisor at Bizzmosis Group
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