Following the issuance of Cabinet Decision No. 142 of 2024 (“CD 142”), the Federal Tax Authority (“FTA”) has activated the Domestic Minimum Top-up Tax (“DMTT” or “Pillar Two”) registration functionality on the EmaraTax portal.
As the DMTT provisions apply to fiscal years commencing on or after 1 January 2025, UAE Constituent Entities that fall within the scope of the UAE Pillar Two legislation are required to register through the EmaraTax portal. However, the due date for registration has not yet been notified by the FTA.
We have outlined below an overview of the DMTT registration process recently introduced by the FTA, together with the key compliance requirements, practical considerations and aspects that taxpayers should assess when determining their UAE registration obligations under the Pillar Two framework.
1. Registration Steps
| Steps | Key Considerations |
| Step 1 – Questionnaire | Under this step, taxpayers are required to determine the basis of their registration, i.e., whether they will register as a Domestic Designated Filing Entity (“DDFE”) on behalf of an MNE Group or as an individual Constituent Entity. Taxpayers must also identify and select the relevant group classification applicable to their circumstances. |
| In addition, taxpayers are required to confirm whether the MNE Group meets the consolidated revenue threshold of EUR 750 million in at least two of the four fiscal years immediately preceding the relevant fiscal year, in accordance with the DMTT eligibility criteria. | |
| Step 2 – MNE Group Information | Under this step, taxpayers are required to provide key information relating to the MNE Group, including the MNE Group name, reporting fiscal year, the name and jurisdiction of the Ultimate Parent Entity (“UPE”), and confirmation as to whether the UPE will file the Pillar Two Information Return in its jurisdiction on behalf of the MNE Group. |
| In addition, taxpayers must provide documents of the MNE Group’s ownership structure, including an overview of the entire corporate structure and all controlling interests held by any Group Entity in another Entity within the same Group. This disclosure should encompass entities located both within and outside the UAE. | |
| Step 3 – Domestic Designated Filing Entity (‘DDFE’) details | Under this step, the DDFE is required to provide information regarding its entity classification, including whether it is a Permanent Establishment (“PE”), Excluded Entity or an Investment Entity for Pillar Two purposes. |
| The EmaraTax portal also provides an option for taxpayers to submit supporting documentary evidence in relation to their Pillar Two Top-up Tax registration application. However, the submission of such documentation is not mandatory and remains optional at this stage. | |
| Step 4 – Domestic Group Entities Details | Under this step, taxpayers are required to provide information on the MNE Group members, including their respective entity classifications, i.e., whether each member is a PE, Excluded Entity or an Investment Entity for Pillar Two purposes. |
| Step 5 – Acknowledgement for DDFE and Designated Local Entity (DLE) | Under this step, the filing entity is required to provide a Letter of Authorization (“LOA”) or an acknowledgement confirming its appointment as the DDFE or DLE. The DDFE may either upload supporting documentation evidencing such authorisation from the relevant Entities or initiate individual acknowledgement requests through the EmaraTax portal. The respective Entities are then required to respond to these acknowledgement requests initiated by the DDFE similar to Tax Group application. |
| Step 6 – Authorized Signatory | Similar to the Corporate Tax registration process, taxpayers are also required to provide details of the authorized signatory. This information is auto-populated in the EmaraTax portal based on the existing Corporate Tax registration. However, taxpayers retain the option to manually upload or update the relevant details where required. |
| Documentation | It is important to note that taxpayers should maintain appropriate documentary evidence to support their registration. Similar to the Corporate Tax registration process, the FTA may request additional information or documentation that is not explicitly specified within the EmaraTax portal at the time of registration. |
Now is the time to assess whether your entity falls within the scope of the DMTT regime and to complete the registration process at the earliest opportunity. This is particularly important as Constituent Entities are required to file their DMTT return no later than fifteen (15) months (or 18 months for the first reporting fiscal year) after the last day of the relevant reporting fiscal year.